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Gramonnati Mandal’s
Arts, Commerce & Science College,Narayangaon.
Taluka-Junnar, District-Pune.
Maharashtra, India
(Affiliated to Savitribai Phule Pune University, Pune)
NAAC - Re-Accredited “A” Grade
Id No. - PU/PN/AC/099/(1993)
Website: www.acscnarayangaon.com
Email – acsc232@gmail.com
International Conference
On
Recent Trends in Commerce
&
Management
Proceeding No 1 - January 2018
Published by
Aarhat Publication & Aarhat Journal’s
108,Gokuldham Park,Dr.Ambedkar Chowk,
Near TV Tower,Badlapur(E),421503
Email ID:aarhatpublication@gmail.com
Mobile No : 9822307164/8355852142
Gramonnati Mandal’s
Arts, Commerce & Science College,Narayangaon.
Published by: Aarhat Publication & Aarhat Journal’s
Mobile No: 9822307164/8355852142
9th and 10th January 2018 ISSN 2278-5655 Volume–VII, Special Issue–I, EDITORS:
Disclaimer: The views expressed herein are those of the authors. The editors, publishers and printers do not guarantee the correctness of facts, and do not accept any liability with respect to the matter published in the book. However editors and publishers can be informed about any error or omission for the sake of improvement. All rights reserved. No part of the publication be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording and or otherwise without the prior written permission of the publisher and authors.
Arts, Commerce & Science College,Narayangaon.
Taluka-Junnar, District-Pune.Maharashtra, India
(Affiliated to Savitribai Phule Pune University, Pune) NAAC - Re-Accredited “A” Grade
Id No. - PU/PN/AC/099/(1993)
Website: www.acscnarayangaon.com
Email – acsc232@gmail.com
Our Tribute
Late – Guruvarya R. P. Sabnis
Alise Nanasaheb Sabnis,
Founder Gramonnati Mandal
Patrons
Hon. Prakash Pate
President, Gramonnati Mandal
Hon. Anil Meher
Chairman, Gramonnati Mandal
Hon. RavindraPargaonkar
Secretary, Gramonnati Mandal
Editorial Board
Dr. J. P. Bhosale
Editor in Chief
Dr. S. D. Takalkar
Editor
Prin.S. S. Shewale
Principal
1.Dr. Arun Chainit (PhranakhonRajabhat University, Bangkok - Thailand)
2. Prin. Dr. Nar Bhahadur Bista (Director, University of Pokhara, Kathmandu, Nepal)
3. Dr. Md. Abdul Hakim (Bangladesh)
4. Dr. Radhe Shyam Pradhan, (Academic Director, Uniglobe College, Kathmandu, Nepal)
5. Dr. Miss. Hedhiya Dilsawar (Iran)
6. Dr. Gour Gopal Banik, (Gauhati Commerce College, Guwahati, Aasam)
7.Dr. D. B. Shinde (Principal, K. K. Wagh College, Pimpalgaon, Nashik)
8.Dr. Emelo Philip Rodriques (Professor, Goa University)
9.Dr. Sanjay Bhayani (Dean Management, Rajkot, Gujrat)
10.Dr. Ahmet Demir(Turkish, Iraq)
11. Dr. Pawan Kumar Poddar (Dean Management, Bhagalpur University, Bihar)
12.Dr.H.D.Thorat (Head Research,S.B.Patil Institute of Management, Pimpri, Pune)
13.Dr. Ali M. M. (Director, SIBER, Kolhapur)
14.Dr. G.H.Barhate(HeadResearch, C.D. Jain College, Shrirampur, Ahmednagar)
15. Dr. D.M. Gujrathi (Head Research, Malpani College, Sangamner)
Message from the Chairman
I congratulate the organizers of the International conference on behalf of
Gramonnati Mandal, Narayangaon, Pune Maharashtra, India. It is a very good
academic activity and I am sure it will motivate the researchers to undertake
further research. The conference will give quality impression about the activities of
our institute to the participants and will strengthen the confidence of our faculty.
The conferencedeals with the theme of International Conference on Recent
Trends in Commerce & Management.
I appreciate the initiative taken by Department of Commerce and Research
centre of thecollege in arranging this International Conference of interdisciplinary
nature providing widescope for researchers, teachers and students to interact on a
single platform. I hope there will be sincere and fruitful discussion on the Recent
Trends in Commerce and Management.
With best wishes…
Hon.Krushiratna Anil Meher
Chairman,
Gramonnati Mandal,
Naraynagon, Pune, India.
Message from Principal
I congratulate the whole team of Department of Commerce and Research
centreon behalf of GramonnatiMandal’s, Arts, Commerce and Science
CollegeNarayangaon, Pune Maharashtra, India. It is a very good academic activity
and I am sure it willmotivate the Teachers, Students &researchers to undertake
further academic activities. The conference will givequality impression of our
College activities to the participants and willstrengthen the confidence of our
faculty.
I hope there will be sincereand fruitful discussion on the topic “Recent
Trends in Commerce & Management.”
With best wishes…
Hon. Prin. S. S. Shewale
Principal,
Arts, Commerce & Science College,
Naraynagon, Pune, India.
EDITORIAL
In the era of Liberalization, Privatization & Globalization (LPG) the
unstable Environment in the corporate & social world created confusion in the
minds of stake holders. The reason for uncertainty is unstable socio-political
environment. Though the change is permanent upon earth, we have to prepare our
minds to accept and should digest the same. Each business entity have its own life.
It is always of limited number of years. We have to find result of uncertainty and
instability in the corporate world in various areas such as human resource,
Commerce, marketing, finance and day to day general management.
We the Gramonnati Mandal’s, Arts, Commerce & Science College,
Narayangaon, particularly the Department of Commerce and Research Centrehave
organized “International Conference on Recent Trends in Commerce &
Management.” We think it is a unique platform and golden opportunities for
academicians, Research Scholars, Faculty Members and students to present their
research work and share their knowledge with suggestions.
We are greatful to Gramonnati Mandal’s President Hon. PrakashPatil,
Chairman Hon. Anil Meher, Secretary Hon. RavindraPargaonkar, all Directors and
office bearers for their continuous motivation and help in organizing this
conference.
We also thankful to our principal Hon. S. S. Shewale who always appreciate
the efforts of faculty members and have assured to support and motivate the
academic and research activities.
We are sure that all of you will extend your cooperation to make this
conference a great success.
Dr. J. P. Bhosale
Editor in Chief &HOD – Research
Dr. S. D. Takalkar
Editor & HOD - Commerce
Aarhat Multidisciplinary International Education
Research Journal (AMIERJ) EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
Index
Sr.
No. Name of Research Paper & Researcher
Page
No.
1
THE IMPACT OF BRAND EXPERIENCE ON BRAND
LOYALTY IN BANKING INDUSTRY
ZAHRA GHANDEHARI ALAVI
01
2
HEALTH AND SAFETY AT MANUFACTURING INDUSTRY
DR. MALLIKARJUNA N. L.
CHITRA
13
3
A CRITICAL STUDY ON CONSUMER BUYING BEHAVIOUR
TOWARDS INSTANT FOOD PRODUCTS WITH SPECIAL
REFERENCE TO BHAGALPUR CITY
PRIYADARSHI ASHOK
PRITI CHIRANIA
16
4
M-BANKING: ISSUES AND CHALLENGES IN INDIAN
BANKING SECTOR
DR. PAWAN KUMAR PODDAR
DR. QUAZI MD. KAMRAN
25
5
ANALYTICAL STUDY OF FRUITS & VEGETABLES
MARKETING IN PUNE DISTRICT
NILESH U BANKAR
DR. J. R. BHOR
30
6
FORENSIC ACCOUNTING AND FRAUD INVESTIGATION
CA MOTILAL B. BHAVNANI
37
7
EMERGING TRENDS IN BANKING INDUSTRY: CHALLENGES
AND PERSPECTIVES
DR. J. P. BHOSALE
44
8
HIGHER EDUCATION: NEED OF QUALITY IMPROVEMENT
DR. S. D. TAKALKAR
49
9
ENTREPRENEURSHIP DEVELOPMENT: A CRITICAL
ANALYSIS
PROF. SANTOSH RAM PAGARE
54
10
ROLE OF MOBILE BANKING IN THE PRESENT ERA
DR. MUNDE SANJEEVANI DASHRATHRAO
59
11
ELECTRONIC ACCOUNTING SYSTEM
PRIN. D. B. SHINDE
PROF. SAVITA KULKARNI-MAIRALPANT
63
12
TO STUDY OF HISTORY AND FUNCTIONS OF URBAN CO-
OPERATIVE BANKS
DR. SANJAY B. SHINDE
67
13
HUMAN RESOURCE MANAGEMENT AND PERFORMANCE: A
REVIEW AND RESEARCH AGENDA
VILAS NICHIT
70
14
ROLE OF FACULTY DEVELOPMENT PROGRAMS IN
IMPROVING TEACHING AND LEARNING
DR. SUNIL ZAGADE
75
15
MUDRA BANKING
DR. H. M. JARE
78
16
TIME MANAGEMENT: EFFECTIVE TOOL OF MANAGEMENT
DR. V. T. PATE
81
17
DIRECT BENEFITS TRANSFER (DBT) IN INDIA: ISSUES AND
CHALLENGES
DR. A. A.JAGADALE
86
18
M COMMERCE & ITS APPLICABILITY
DR.REKHA APPASAHEB KADHANE
91
19
RECENT TRENDS IN BANKING TECHNOLOGY
DR.PAWAR SUNIL DADARAM
96
20
TIME MANAGEMENT– IMPORTANT TIPS OF TIME
MANAGEMENT
PRANITA P. SAHANE
GOVIND H. SONAWANE
98
21
CURRENT TRENDS IN STRESS MANAGEMENT
PROF. DR. SHELAR B. A.
102
22
HUMAN RESOURCE ACCOUNTING (HRA)
DR. PACHORE ROHINI N.
106
23
STUDY OF IMPACT OF GOODS AND SERVICES TAX ON
SERVICE INDUSTRY. (HOTEL, EDUCATION, HEALTH)
PROF. DR. GADHE D. P.
110
24
A STUDY OF PREVIOUS TAX STRUCTURE AND GOODS AND
SERVICE TAX
DR. VAISHALI M. DESHPANDE
115
25
EFFECT OF GST ON INSURANCE
DR. RATI CHANDRA
119
26
THE IMPACT OF E COMMERCE IN DEVELOPING COUNTRIES
AND NEW EMERGING BRAND EXTENSION
SUROJIT SAHA
DEEPAK SINGH PARMAR
122
27
RECENT TRENDS IN NEWSPAPER MARKETING
NEETA MANOHAR KEDAR
DR. P. V. SATHE
130
28
BASIC CONCEPTS OF GOODS AND SERVICES TAX IN INDIA
SUPRIYA UTTAM JADHAV – HADAWALE
134
29
A FUTURISTIC STUDY OF E-BUSINESS MODEL WITH
REFERENCE TO ALL TRANSPORT INDIA PVT. LTD., DEOLA
DR. SUBHASH WADEKAR
139
30
IMPACT OF GOODS AND SERVICES TAX ON INDIAN
ECONOMY
DR. DEEPAK K. SURVASE
144
31
BLIND SPOT AND MARKET RISK
DR. SAROJ HIREMATH
148
32
IMPACT OF REMITTANCE ON ECONOMIC GROWTH AND
POVERTY ALLEVIATION IN NEPAL
Dr. NAR BAHADUR BISTA,
YEGYA BAHADUR K.C.
154
33
IMPACT OF CORPORATE GOVERNANCE ON DIVIDEND
POLICY OF NEPALESE ENTERPRISE
DR. RADHE S. PRADHAN
NITESH RAJ BARTAULA
OM SHRESTHA
POOJA GNAWALI
POSHAN LAMICHHANE
PRATIKSHA PARAJULI
167
34
FOREIGN DIRECT INVESTMENT: IMPACT ON INDIA
DR.J.P.BHOSALE
182
35
UNDERSTANDING THEBASIC OFBITCOIN
CA KIRAN GAJJAR
186
36
AN IMPACT OF STRATEGIC HUMAN RESOURCE
MANAGEMENT ON ORGANIZATIONAL PERFORMANCE
DR.KALHAPURE BALASAHEB. B.
192
37
CHALLENGES FACED BY BANK EMPLOYEES WITH THE
ADVENT OF INFORMATION TECHNOLOGY: A MODERN
OUTLOOK
AUSARE INDIRARANI YASHWANT
197
38
GST (ONE NATION ONE TAX)...A STUDY OF
IMPLEMENTATION AND CHALLENGES.
DR. D.D. BALSARAF
SHRUTI GANPULE
201
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
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THE IMPACT OF BRAND EXPERIENCE ON BRAND LOYALTY
IN BANKING INDUSTRY
ZAHRA GHANDEHARI ALAVI
Ph.D. Candidate
Department of Business Management,
Qazvin Branch, Islamic Azad
University, Qazvin, Iran.
FERESHTEH LOTFIZADEH
Assistant Professor of Marketing
Department of Business Management,
Zanjan Branch,Islamic Azad University,
Zanjan, Iran.
Abstract
With the advancement of technology and more competitive market conditions in
various manufacturing and service sectors, customer loyalty is as the main asset of a
company because customer loyalty leads to business success, increase profitability and
customer value creation. The present filed study, conducted with actual and legal costumers,
addresses the question whether different consumers prefer experimental appeals and
experimental types creates the relationship between brand experience, satisfaction and
loyalty. Brand experience is conceptualized as sensations, feeling, and cognitions and
behavioral responses. In this study, brand experience affects satisfaction and loyalty. In this
present research, we propose the effects of brand experiences with trust, service quality,
perceived value and loyalty. The study conducted on 372 respondents in City bank branches
in Tehran. This research is applied from the perspective objective and it is descriptive and
correlation from the method of data collection. As a result of this study all hypothesis were
confirmed.
Keywords: Brand experience, service quality, perceived value, trust, customer loyalty.
Introduction
Today, more than past, we see
increasing importance of the customization
which is the main competitive advantage of
organizations and its role in success and
progress of business. (Ranjbran, and kaboli
and sanayee, 2102). on the other hand given
the importance of customer in today's
competitive world, particularly in the
banking industry and according to research
that carried out the cost of attracting new
customer is more than the expense for
customer retention, examining ways to gain
and maintain customer loyalty has high
priorities. On the other hand, banks that are
economical and service enterprises like any
firm must earn profit to survive and develop,
and this profit also depends on attracting and
keeping customers. Moreover a new
category in the competition space between
banks is branding. Special attention to the
brand value, brand position, brand loyalty
and brand identity of goods and services
have been led many theorists, administrators
and researchers named the future world of
marketing to the brand world and the
activities of branding (Hung bon Kim and
Gon kim, 2005). So the development of
consumer-brand relationship has been focus
of branding theory in recent years. A brand
acts as a mechanism in engaging both buyer
and seller in a long-term consumer-brand
relationship. (Davis, Oliver and Brodie,
2000; Fournier, 1998; Keller 1993, 1998;
Rao and Ruekert, 1994) Notably, brand
experience has attracted a lot of attention in
marketing Practice. Marketing practitioners
have come to realize that understanding how
Consumers experience brands is critical for
developing marketing strategies for goods
and service (Brakus. Schmitt & Lia
Zarantonello 2009).in the other word, in a
complex and competitive environment in the
banking system, the slightest difference in
services along with increased customer
demand, leading to major changes in this
industry. The bank must identify the exact
dimensions of customer loyalty so that they
create some systems in order to implement
and guidance customer loyalty. Therefore to
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achieve this goal in the City bank that is one
of the newly founded and private banks in
the country which is seeking to expand its
branches in other cities, the main question in
the this research is that which are the various
aspects influencing the ways to achieve and
maintain customer loyalty in the City bank
branches in Tehran? In this study, the
relationship between brand experience and
loyalty has been examined through three
variables involving service quality,
perceived value and ultimately in terms of
their effect on loyalty and trust were
examined and finally we studied their effect
on loyalty.
Literature Review
Development culture of the customer
through brand experience and its relation to
their loyalty to the organization is that a
discussion that has always been considered
by the experts and in the recent years
attempts have been made to increase the
quality of the product or service by
providing necessary approaches to
organizations(Jskv et al 2009). For as much
as, consumers are as a milestone in the
successful marketing activities and study on
the factors which affect consumer behavior
causes to access to knowledge and
understanding of consumer behavior
therefore Marketers will be able to provide a
product that is more adapted to the needs and
demands of consumers. In other words, they
offer a product which is a result of factors
influencing consumer behavior and it
provides maximum satisfaction. In
competitive marketing, loyalty is an essential
element of the marketing strategy by
reduction the predictive power and
difference between products. (Yearend &
yaw, 1997).
Brand experience
Most of the research on experiences
to date has focused on utilitarian product
attributes and category experiences, not on
experiences provided by brands. Brand
experience is conceptualized as sensations,
feelings, cognitions and behavioral
responses evoked by brand-related and
stimuli that are part of a brand‘s design and
Identity, packaging, communications, and
environments (Brakus et al., 2009).
According to Alloza (2008), brand
experience can be defined as the perception
of the consumers, at every moment of
contact they have with the brand, whether it
is in the brand images projected in
advertising, during the first personal contact,
or the level of quality concerning the
personal treatment they receive. Brand
experience is created when customers use
the brand; talk to others about the brand;
seek out brand Information, promotions, and
events, and so on (Ambler et al.,
2002).Brand marketers must bond with
consumers by staging holistic brand
experiences (e.g., Schmitt 1999, Pine and
Gilmore, 1999).The marketing activities
associated with the brand, effects the
consumers" mind-set" with respect to the
brand-what they know and feel about the
brand. The customer mind-set everything
that exist in the minds of customers with
respect to a brand; thoughts, feelings,
experiences, images, perceptions, beliefs,
attitudes and so on, that is, brand equity as
defined by Ambler (2000). When consumers
search for, shop for, and consumer brands,
they are exposed to utilitarian product
however; they are also exposed to various
specific brand-related stimuli, such as brand-
identifying colors (Belize and Hite, 1992;
Gorn et al., 1997; Meyers-Levy and
Peracchio 1995), shapes, typefaces,
background design elements(Mandel and
Johnson, 2002) , slogans, mascots, and brand
character (Keller Brakus et al., 2009). These
brand-related stimuli appear as part of a
brand's design and identity (e.g., name, logo,
signage), packaging, and marketing
communications (e.g., advertisements,
brochures, Web sites) and in environments
in which the brand is marketed or sold (e.g.,
stores, events).These brand related Stimuli
constitute the major source of subjective,
internal consumer responses, which is
referred as "brand experience" (Brakus, et
al., 2009). Thus, brand experience is
conceptualized as subjective, internal
Consumer responses (sensations feelings,
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
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and cognitions) and behavioral responses
evoked by brand related stimuli that are part
of a brand's design and identity, packaging,
communications and environments. Brand
experience conceptualization and scale
development are very important for
understanding and managing brand trust and
loyalty concepts (Brakus et al, 2009). Brand
experience can be positive or negative,
short-lived, or long-lasting. Moreover, brand
experience can positively affect consumer
satisfaction and brand loyalty, as well as
brand trust (Zarantenello and Schmitt, 2000;
Ha and Perks, 2005). Brand experience is
empirically distinct from other brand and
customer-focused concepts including brand
attachment, brand involvement, and
consumer delight (Zarantenello and Schmitt,
2000).
Brand Loyalty
Loyalty, as defined by Oliver (1997),
is "a deeply held commitment to rebut or
repatronize a preferred product/service
consistently in the future, theory causing
repetitive same-brand or same brand-set
purchasing, despite situational influences
and marketing efforts having the potential to
cause switching behavior" (Chaudhuri and
Holbrook, 2001). In marketing literature the
term loyalty has often been used
interchangeably with its operational
(measurement) definition to refer to; repeat
purchase, preference, commitment and
allegiance. In addition, loyalty has been
referred to in a variety of market-specific
contexts, for example, service, store and
vendor loyalty, contexts that reflect the unit
of measurement; customer and brand loyalty
(Algesheimer et at., 2005).
Brand satisfaction
Satisfaction is defined as an effective
response to purchase situation (Babin and
Griffin, 1998; Bagozzi et al., 1999; Bennet et
al., 2005; Anderson and Narus, 1990).
Satisfaction is a positive affective reaction to
an outcome of a prior experience (Ganesan
1994). The satisfaction derived and attitude
formed as part of a prior experience
(Ganesan, 1994) then impacts on subsequent
purchases (Oliver, 1980), completing
cyclical pattern (Bennett et al, 2005).
Service quality
Parsam Introduced service quality is
as a result of the gap between customer
expectations and perception of service
received. (Venus 59, 2101). Customers often
compare services provided of an
organization by service of its expected. They
go back to this organization If services
provided prior to or at least equal to it's the
expected service. Thus it is the responsibility
of the service provider identifies and reviews
their customers' expectations about services
quality (Kotler and Armstrong.
Perceived value
Marketing activities have mainly
been established based on customer value
(Holbark 1994). Perceived customer value is
defined in marketing to assess the costs and
benefits gained from the purchase of a
product or service (Yang and Peterson
2004). Previous research suggests that
perceived value increases customer
satisfaction and future purchases (Jenkins
2010).
Brand Trust
Trust is essential in building strong
consumer-brand relationships (Fournier,
1998; Urban, Sultan, and Qualls, 2000), and
it is positively related to brand loyalty (Lau
and Lee, 1999). Consumers develop trust in
a brand based on positive beliefs regarding
their expectation for the behavior of the
organization and the performance of
products a brand represents (Ashley and
Leonard, 2009). Trust reflects cumulative
effects over time on loyalty in high-
involvement, high-service product markets
(Chiou and Droge, 2006).
The closest and most important
internal and external research done
previously in connection with the subject of
research has been mentioned in the
following:
Mohammad Ishaq in 2012 examined
customer loyalty by the three main variables
of service quality, perceived value and the
company's image. He has done a research in
the telecommunications industry in Pakistan
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conclude that image company does not have
any influence on customer loyalty and vice
versa.
Table1- Pass related literature review
Survey Results Authors Affecting variables on brand
Positive influence satisfaction and
loyalty, trust and Loyalty and value
Special brand with satisfaction and
loyalty in banking industry.
Hosseini and
Ahmadinejad
(2008)
Satisfaction, trust, brand
equity in the bank
Confirmed the positive relationship
between service quality, perceived
value, customer satisfaction and trust
Rnjbrban,
Moradian,
industries (2012)
Perceived value, service
quality, customer
satisfaction,
Loyalty by Brand Citizen
Confirmed the positive relationship
between service quality and customer
satisfaction
Taleghani and
Mir Mousavi
(2011)
Customer satisfaction,
quality of service in banks
Confirm the relationship between
service quality, perceived value and
trust On customer satisfaction
Samadi and
Alexander
(2011)
Customer satisfaction,
service quality, perceived
value and trust
There is a positive relationship
between brand experience and loyalty
and between customer satisfaction
and loyalty .
Brakus. Schmitt
& Lia
Zarantonello (
2009)
Brand experience, loyalty,
customer satisfaction
Brand experience impact on trust,
brand reputation and customer
satisfaction
Thomas.
Veloutsou (
2011)
Brand experience, trust,
brand reputation, customer
satisfaction
Positive relationship between the
brand experience and trust
Positive relationship between brand
experience and satisfaction Positive
relationship between brand
experience and loyalty
Sahin.Zehir.Kita
pc(2011)
Brand experience, brand
trust, brand satisfaction and
brand loyalty
Confirm the relationship of trust and
satisfaction on the commitment and
relationship commitment and loyalty
on brand
Luarn & Lin
(2009)
Trust, satisfaction, perceived
value, commitment
Confirm the moderator role emotional
satisfaction to brand loyalty
Ebad Baig &
Khan (2010)
Emotional satisfaction,
customer satisfaction, brand
loyalty
Confirmed the positive relationship
between service quality and customer
satisfaction and Confirmed the
positive relationship between
satisfaction and brand loyalty
Yeung &
Leung(2011)
Service quality, perceived
value, satisfaction
Confirmed the positive relationship
between brand image and brand
loyalty by making adjustments
demographic variables
Hsiung (2011) Brand image and customer
satisfaction.
Confirm the relationship between
service quality and perceived value to
customer loyalty
Mirabi vahid
Reza &
vazifefdust
Customer loyalty in banking
services
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Hossien &
Sabgoo Monsef
Seyed
Mahamoud
(2012)
Confirm Service quality, motivation
and behavior customer on the loyalty
Seth & Deshukh
(2006)
Service quality, motivation
and behavior customer on the
loyalty
Confirm the relationship between
perceived value and customer
experience
Scachez,
callarisa &
odriguez (2006)
Perceived value, brand
experience of tourism
Perceived value and service quality
are two factors affecting the level of
customer loyalty. He has been compared it to
other research in the American and European
countries and resulted culture plays an
important role in the loyalty of customers in
the telecommunications industry.
Yang and Peterson in 2004 examined
the issue of perceived value, satisfaction and
loyalty with respect to the switching cost.
These researchers collected used data
through review websites and sending 4000
emails to customers. Base on the results of
this research, the perceived value and
satisfaction have a meaningful and direct
relationship with loyalty of customers. It
shows that the switching cost as the
moderator variable compared with
satisfaction and perceived value has less
impact on loyalty.
In other research, Sahin et al (2005)
examined the effects of brand experience,
confidence and satisfaction on customer
loyalty of manufacturing company in
London. In their research they reviewed the
relationship between variables such as brand
experience and loyalty, brand experience and
satisfaction and satisfaction and loyalty and
all were confirmed. The findings also
indicated that satisfaction as a mediator
variable has been which has a significant
impact on customer loyalty. Briefly, table 1
summarizes the internal and external
research done in this field. As can be
observed in the relationship between brand
experience and loyalty has not been done a
lot. And abroad as well as researcher found a
few articles to be review.
Develop hypotheses and Conceptual
Model
A strong brand has a positive impact on
consumer attitudes toward the company's
identity. A positive attitude is shaped in
order to have a good experience. Awareness
of the brand name and logo has an effect on
the perceptual quality of the customer will
lead directly to loyalty (Keller, 1993). On
the other hand, development of relationships
between brands and consumers result in
focusing on the hypotheses brand so that
brand act as a mechanism that the stable
relationship can involve seller and buyer so
brand experience is the input and the brand
loyalty is output (Rovkt, 1994. Fournier,
1998. oliver, Brody and David, 2000). Sahin
et al (2005) in a study presented the effects
of brand experience, trust and satisfaction on
customer loyalty in an automobile factory
and they resulted that for customer loyalty,
companies need to feel satisfied with their
brand experience and encourage customers
to loyalty through trust. Also in 2009, an
investigation was carried by Bruck and
Brands that discussed the aspects of brand
experience and concluded relationship
between experience and brand loyalty is
positive. In this research, five features of
brand were examined including intimacy,
excitement, competence, sophistication and
violence and they announced there is a direct
relation between brand associations and the
degree of customer loyalty. In all of the
research that done the direct and positive
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relationship between experience and brand loyalty are confirmed.
Figure1: Research Model ((Sahin et al., 2011)
In 2011, Azizi. Ketabi and Kamal
presented a model in an article that
investigates the effects of brand experience
and satisfaction in the structure of brand
loyalty that they reviewed the impact of the
brand experience on the satisfaction and
loyalty and resulted there is a Positive
relationship between the dependent and
independent variables.
In this model, the experience refers
to the response of consumer within a
specified time and brand experience includes
assessment, attachment, affiliation, brand
personality and customer delight. Brand
experience has an effect on behavior.
Directly and indirectly through impacts
customer satisfaction and loyalty to the
brand character. On the other hand, this
model is also based on an article Mirabi,
vazifedust and Shabgoo in 2012 that
customer satisfaction with the components
of service quality, perceived value and trust
has shown that separately and generally
brand experience is evaluated on each of
these components.
The conceptual model of this
research developed in the combination of
these two models.
Hypothesis in this research:
The current model in this study has
been developed from two researches. One of
them is Aziz Sahin, Kamal and KIyatibi, in
2011 presented a model of Brand,
Experience, and Satisfaction in Brand
Loyalty Structure. Another is Miraby,
Vazifedoost and Shabgoo in 2012 that
entitled ―design a model for describing
customer loyalty to brand and customer
satisfaction on loyalty‖.
Based on the conceptual model, research
hypotheses include:
H1: Brand experience has a positive effect
on loyalty.
H2: brand experience has a positive effect on
satisfaction
H2-1: brand experience has a positive effect
on perceived value
H2-2: brand experience has a positive effect
on service quality.
H2-3: brand experience has a Positive effect
on the trust
H3: satisfaction has a positive impact on
loyalty.
H3-1: perceived value has a positive effect
on loyalty.
H3-2: service quality has a positive effect on
loyalty.
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H3-3: trust has a positive effect on loyalty
Research Methodology
This research In terms of methods
and implementation of descriptive -
analytical design with an emphasis on
correlation branches and in terms of goal is
applied type finally, in terms of method of
data collection and information, type of this
is field research. In the present study, in
order to use the views and attitudes of bank
customers, questionnaire is used, questions
in the questionnaire was designed in a way
that respondents, mark items based on the
five-interval Likert scale of very low to very
high.
In this study, to analyze the data and
hypotheses testing is used descriptive
statistics and structural equations method,
and for implementation of structural
equation model the LISREL software, was
used. One of the methods for reviews causal
relationships between variables is "structural
equations model". This method is mentioned
as a causal model. When the data obtained
from sample as correlation matrix or
becomes covariance and be defined by a set
of regression equations, model can be
analyzed by using (LISREL) software, and
test fitting of it for society that samples
extracted from. Statistical population of this
research involve real and legal customer of
City bank in Tehran that they have active
deposit account and use the banking services
more than 4 years. Sampling procedure of
this research is cluster that Tehran was
divided to the five regions North, South,
East, West and Center and the sample size
was estimated 384 by using the formula of
Cochran that at the end , among
questionnaires, 372returned questionnaires
were completed and the data was entered
into the system. The sample size was
obtained 372 in the Confidence level of 95%
and estimated error of % 5 in the Population.
To achieve the minimum required sample
survey (372 customers), 375 questionnaires
were distributed among bank customers.
Table 2- operational definition of variables Variable
Data Analysis and Findings
Table 4 shows Frequency distribution
of general or demographic variables. Based
on the table, 156 respondents are female and
216 males make up 58 percent of the
respondents. Also in Table 4, Frequency
distribution the other variables shown.
One sample Student‘s t-test
This study consisted of 5 variables
that each on has several agents. Brand
experience, perceived value and trust have 2
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agents, service quality with 3 agents and the
loyalty has no agent. The researcher used
one sample T-test to determine the current
status of each question so that other
variables except the variable loyalty are in
proper status. The significance level for all
agents was tested that is smaller than the
error rate (0.05, therefore difference between
these questions and value of test is
significant and according to the amount of
T-Test and confidence interval, It can be said
the current status of each of the agents in the
study are greater than the value of the test
(3) and they are in the proper status.
Table 3 - Demographic variables
Correlation analysis between variables
Before the model in terms of
structural equation to be investigated, the
correlation between the variables was
examined. SPSS software and the Pearson
correlation test were used to assess the
intensity of this relationship and type of
relationship between the dependent and
independent variables and to test hypotheses.
There are the results of the correlation
between the endogenous and exogenous
variables of the model In Table 5 that show
the Positive and significant correlation for
them. Respectively the highest and lowest
correlation is between the variable of loyalty
and perceived value (599 /.) and brand
experience and trust (273 /.).
Table 4 - Results of the correlation
variable loyalty Brand experience Perceived value Service quality Trust
Loyalty 1 0.328 0.599 0.347 0.465
Brand experience 1 0.488 0.326 0.273
Perceived value 1 0.364 0.306
service quality 1 0.327
Trust 1
Structural model of (path analysis)
research In this section, we tested the
hypothesis of model with structural analysis.
Structural equation modeling with using
LISREL statistical software was used for the
test the hypothesis. This structural model of
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research is shown in Figure 2 in standard mode.
Figure 2. Structural model of research in standard mode
According to Table 7, all indicators of model fitting have desirable condition.
Table 5- current and ideal State of model fitting indexes
Fitting indicator Desirable Status Status model
RMSEA less than 0.08 is Appropriate 0.02
χ2 to df less than 0.03 is Appropriate 1.15
GFI Above 90% 0.94
AGFI Above 90% 0.91
In Table 7, RMSEA and χ2 are both appropriate and low. Therefore, the research model
has a high degree of fitness and reliability.
In Table 7, the path coefficients and significant numbers are considered for each one. This
table shows the direction and intensity of relationships and provides judgments about the
research hypotheses.
In Table 8, all of the studied pathways in the research are positive and significant. In other
words, all the paths showing the effect of exogenous variables on endogenous variables are
positive and significant.
Table 6
Results of test of hypotheses about relations between variables
Relationship Path coefficient T value Test result
Direct influence indirect influence
H1 0.49 0.17 4.42 Confirmed
H2 0.68 - 8.56 Confirmed
H2-1 0.58 - 8.59 Confirmed
H2-2 0.67 - 9.49 Confirmed
H2-3 0.55 - 8 Confirmed
H3 0.25 - 2.31 Confirmed
H3-1 0.29 - 3.89 Confirmed
H3-2 0.20 - 2.55 Confirmed
H3-3 0.28 - 3.96 Confirmed
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Conclusions
The main objective of this study was
to analyze the effects of brand experience on
brand loyalty. The domain of consumer
behavior research is based on the
relationship between brand experience and
brand loyalty in customers of City Bank
Branches in Tehran. 400 questionnaires in 5
points of the North, South, West, East and
center of Tehran were distributed. as the
result, 372 cases were investigated for
completeness.
To evaluate the impact of
demographic variables on customer loyalty,
T-test and ANOVA test were used. Test
results indicate that each of the demographic
variables have different effects on the bank's
customer loyalty. At reviews the age of
respondents was determined that People with
an mean age between 20 to 30 years than in
people between the age 30 to 40 and 50 to 60
have less loyalty. In examining the education
level of respondents, There is a difference
between the average of the different
categories of education respondents and
those with a bachelor's degree are loyal than
the other groups. In investigating variable of
benefit from the services of the bank who
has experience for 3 months in the use of
banking services are less loyal than those
who benefit from the services of the bank for
2 years. There is no meaningful difference
between the mean various categories as way
of familiar, performing the rest banking
affairs and occupation of person. By using
confirmatory factor analysis and structural
equation models, the brand experience on
the loyalty and customer satisfaction at the
same two level of model: service quality,
perceived value, trust in the banking
industry's has a positive impact.
Satisfaction also has positive effects
on loyalty. In other words, service quality,
perceived value and trust have a great and
important influence on loyalty. They are the
major elements to retain and attract
customers to the bank. On the other hand,
due to the fact that banks are primarily
service organizations, they are interacting
directly with customers; brand experience of
banks is effective on the customer
satisfaction and loyalty. Also the level of
service that customer receive from banks,
level of value which they want from bank by
experience of brand and the degree of trust
in dealing with the bank has a direct
relationship customer loyalty and generally
customer satisfaction from the banking
services is effective on the level of loyalty.
The results showed that the
relationship between the brand experience
and brand loyalty in the first hypothesis, is
direct and meaningful relationship and
analysis of brand experience positive effects
on brand loyalty. And these findings by
Sahin et al. (2011) and Smith and Zrantlo in
2009 were confirmed. Relationship between
brand experience and satisfactions was
verified and it is positive and significant and
if customers experience a brand and be
satisfied, it will cause loyalty in customers
Sahin et al. (2011). On the other hand,
regarding to the relationship brand
experience as independent variables with
three mediator variable service quality,
perceived value and trust that a direct
relationship was proved and if City bank
brand were experienced by the clients of the
bank in accordance with the service quality
of bank and perceived value is consistent
with their interests, they will trust and
eventually they become loyal customers of
the bank, thus the relationship between
mediator variable with the dependent
variable loyalty was proved.
Suggestions
Selling banking services is the
beginning of a long-term relationship with
the customer. For more loyalty of customers,
city bank executives should pay more
attention to the depth and length of
relationships with customers, and in this
regard, the attention to the psychology of
emotions, affections and customer desires as
well as talent, cognition and thinking it is
very important from the bank. The
strengthening of the two important elements
of the emotion impact and the link between
the bank and the client can lead one of the
bank's priorities so that the customers will
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use the Bank's services again. On the other
hand, it is essential for Bank City executives
to make strategic plans, cost less, and
appropriate advertisements to carve City
Bank Brand in the minds of their customers.
To create a sense of satisfaction in customer,
create ATMs, heat and cold appliances,
provide facilities such as telephone services,
Internet and quiet and relaxed, undisturbed
location, and holding in-service training for
employees to build skills, speed and
accuracy will lead to better customer loyalty
to the bank. Implementation of e-banking in
accordance with customers' requirements
and planning in advertising will be caused to
build confidence in the brand-name City
bank. The mutual understanding of the needs
of customers in the undergraduate education
(the highest percentage of clients in the
demographic variables of education) and the
attention to the records of people's benefits
and special privileges from other factors
affecting customer loyalty to the brand of the
City bank. One of the main limitations of
this research is the selection of statistical
samples. The statistical sample of the
research is limited to customers of Bank of
the City of Tehran Branches who have an
active deposit account. They have been
selected for banking services for more than
four years then and other customers of this
bank should be omitted and the
generalization of the results to all customers
of banks should be cautious. The other
important limitation of the research was the
lack of proper and relevant scientific
resources related to the brand experience,
especially in the field of services and
obtaining the necessary information and its
relation with loyalty.
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Mary W., (1993), ―The Antecedents and
Consequences of Customer Satisfaction
for Firms‖, Marketing Science, Vol.12,
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(2006), ―Some Antecedents and
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market, focusing on the banking
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HEALTH AND SAFETY AT MANUFACTURING INDUSTRY
DR. MALLIKARJUNA N.L.
Chairman of Management Department
Akkamahadevi Womens University
Vijayapura
CHITRA
Research Scholar
Management Department Akkamahadevi
Womens University Vijayapura
ABSTRACT
Health and safety issues have always been a major problem and concern in the
manufacturing industry. Wherever reliable records are available, manufacturing is found to
be one of the most dangerous on health and safety criteria, particularly in developing
countries. Efforts have been made to address this problem, but the results have been far from
satisfactory, as manufacturing accidents continue to dominate the overall manufacturing
industry. Despite the programs implemented by government authorities and measures
introduced by companies themselves, the number of construction accidents still remains
alarmingly high.
In developing countries, safety rules usually do not exist; if they do, the regulatory
authority is usually very weak in implementing such rules effectively. India is one of
developing countries that are currently enjoying a strong growth in manufacturing activities.
Unfortunately, some sectors of its manufacturing industry suffer from poor safety and health
conditions. Any framework of the existing occupational and health conditions is fragmented
and inadequately enforced, making manufacturing sites more hazardous. It may even be
argued that relevant regulations are outdated and irrelevant in day-to-day manufacturing
operations. To reach this objective an overview of the published materials as well as the
legislation has been undertaken. In addition, structured interviews were carried out with
selected managers from a selection of manufacturing, medium and large size. This thesis
specifically, it investigates the safety perceptions, attitudes, and behaviour of construction
workers and management safety practices. Based upon the analysis of the results, this study
has demonstrated that the majority of those questioned Indian manufacturing companies
have a poor degree of risk awareness and do not seems to take health and safety as an
important issue.
Key words: Health and safety, OHSAS
Introduction
In India the manufacturing industries
play a major role in economic development
of the country providing more employability
to the younger generation to become
financially independent to their daily
livelihood. Industries comply with
international health and safety standards in
their manufacturing process to prevent any
industrial risk/accidents. Such as working
environment, Cleanliness, temperature,
drinking water, lightening, building safety,
fire safety, electrical safety, chemical safety.
All the manufacturing industries should
maintain BS, OHSAS (Occupational Health
and Safety Assessment Series) 18001/2007.
It has Occupational health and safety
management system.
An effective safety and health
management system is the key to reducing
the number and severity of workplace
injuries and illnesses, resulting in lower
accident-related costs. In this course, you
will learn to effectively implement a
company‘s safety and health management
system and the four core elements of an
effective safety and health system and the
central issues critical to each element‘s
proper management.
Literature Review
According to National Safety
Council (NSC as cited in Mitropoulos,
Abdellamid And Howell, 2005,p.817) a
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hazard is ―an unsafe condition or activity
that, if left uncontrolled can contribute to an
accident‖.
Potential hazards are identified based
on the knowledge of operations and past
experience with similar work tasks.
According to Abdelhamid and Everest
(2000), occupational accidents occur due to
one or more of the following causes:-
1.failing to identify an unsafe condition that
existed before an activity was
started.2.Deciding to proceed with a work
activity after the worker identifies an
existing unsafe condition or 3.Deciding to
act unsafe regardless of initial conditions of
the work environment. According to Wilson
(1989), workers are usually exposed to risk
either because of their lack of knowledge
about workplace hazards due to limited
experience and knowledge or failure to
behave safely, which may be associated with
the workers attitude toward safety
(Abdelhamid & Everett, 2000) or the
underestimation of perceived risk (Bailey,
1997; Choudhry & Fang, 2008). According
to Conor CO Reynolds; M Anne Harris;
Peter A Cripton; Meghan Winters (2009),
Bicycling has the potential to improve
fitness. Understanding ways of making
bicycling safer is important to improving
population health. We reviewed studies of
the impact of transportation infrastructure on
bicyclist safety. To assess safety, studies
examining the following outcomes were
included: injuries; injury severity; and
crashes. Results to date suggest that
sidewalks and multi-use trails pose the
highest risk, major roads are more hazardous
than minor roads, and the presence of
bicycle facilities (e.g. on-road bike routes,
on-road marked bike lanes, and off-road bike
paths) was associated with the lowest risk.
Street lighting, paved surfaces, and low-
angled grades are additional factors that
appear to improve cyclist safety.
Objectives
1. To evaluate Health and safety policy and
procedures with International Standards,
analyze the variance of health and safety
standards
2. To identify best practices of Health and
safety management system.
3. To find out the percentage of risk and
accidents in the industries.
4. Improve the Safety of
equipment/activities, with a special
emphasis on lifelines.
5. Achieve higher productivity among the
employees by providing a safe and
secure environment
6. Focus on employees‘ safety and health
arising from chemicals and hazardous
elements used at workplaces.
The Main functions of the Health and
Safety Team are:-
1. Internal liaison with Managers
responsible for health and safety related
functions
2. Responsible for developing and putting
into effect an Industry health and safety
policy.
3. Formulate and promote relevant
standards and supporting guidance to
comply with health and safety
legislation.
4. Sets targets to improve health and safety
and benchmark the Industry performance
against others in the sector.
5. Monitor health and safety management
and performance of the Industry and its
constituent parts.
6. Investigate accidents and dangerous
occurrences, as appropriate.
7. Liaise with health and safety
enforcement authorities (HSE, Local
Authority and Fire and Rescue Service).
8. Liaise with Trade Unions on health and
safety matters.
9. Promote and provide health and safety
training.
10. Monitor reports of accidents and
incidents to identify issues and solutions.
Scope
Health and safety management
system is a process put in place by an
employer to minimize the risk and injuries,
illness. Health and Safety management have
a wide scope to implement international
standards in Indian manufacturing
companies. Recent past very few researches
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had been conducted and focused in this
system to update health and safety standards
to eliminate or reduce the risk in good
working environment. Workers should know
about their rights in procuring a worker
friendly environment that provides them
hazard free life, healthy life styles and safe
atmosphere. Workers should be aware of
their responsibilities and duties towards the
utilization of the ergonomic facilities
provided to them. This ensures a clean and
safe work environment enabling
occupational safety.
Significance
Health and Safety management
system is a planned process or procedures to
carry out a certain activities in work place. It
is the held responsibility of the management
and state government (Factory inspectors,
Labor officers and welfare officers). They
used to ensure that every Health and Safety
standards and precautions as to taken to
reduce accidents and risk in work
place.Having this concept its more
significant to adopt BS 18001 and 2007,
OHSAS(Occupational Health and Safety
Assessment Series) Standards. The
importance of the research stems from the
need to develop an understanding and
investigate the problem of health and safety
in manufacturing Industry and make a
contribution to knowledge in this area where
a very little information exists. Addressing
health and safety issues should not be seen
as a regulatory burden as it offers significant
opportunities and benefits to the
manufacturing industry.
Limitation
The study is limited to
Manufacturing industry .Data on work place
safety and health provide information on the
well being of workers beyond whether or not
a person has work. They are also useful for
planning preventive measure.
Conclusion
Occupational Safety and Health
(OSH) is a cross-disciplinary area concerned
with protecting the safety, health and welfare
of people engaged in work or employment.
The goal of occupational safety and health
programmes is to foster a safe and healthy
work environment.
This study assessed the effectiveness
of OHSMSs in improving OHSAS
conditions. The results revealed that the
safety performance of OHSAS 18001-
certified companies is better than that of
noncertified companies. Therefore, it can be
concluded that OHSMSs improve OHS
conditions and support healthy and safe
workplaces. However, establishing and
implementing an OHSMS is only the first
step in the structured management of health
and safety systems in the working
environment. To consolidate their role, and
increase their acceptance by employees and
other beneficiaries, their performance must
be assessed using appropriate indicators.
References
1. www.occupationalhealthandsafety.com
2. Journal : www.e-shaw.org
3. Kahn, W.A. (1990). Psychological
conditions of personal engagement and
disengagement at work. Academy of
Management Journal.
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A CRITICAL STUDY ON CONSUMER BUYING BEHAVIOUR TOWARDS
INSTANT FOOD PRODUCTS WITH SPECIAL
REFERENCE TO BHAGALPUR CITY
PRIYADARSHI ASHOK
Ph.D. Research Scholar,
University Department of Commerce &
Business Administration,
Tilka Manjhi Bhagalpur University, Bihar.
PRITI CHIRANIA
Ph.D. Research Scholar,
University Department of Commerce &
Business Administration,
Tilka Manjhi Bhagalpur University, Bihar.
ABSTRACT
With globalization and modernization, the cutting edge aggressive business depends
on understanding the best items and administrations that he needs. Considering reality that
the buyer is the ruler, understanding the conduct of the buyers is an extraordinary test.
Today, moment nourishment items possess an honest to goodness rack space in stores
and general stores in India. New and high calibre of moment nourishment items have
changed the way of life of individuals and prompted more number of Indian organizations
enter the market with assortments of moment food items . Moment food items influence them
to cook whenever with less to work, time and vitality so as to determine a specialty mastery of
inferred discoveries, the examination was confined to just marked prepared to eat and
prepared to cook nourishment items and to Consumers who knew about these nourishment
items. The data of 110 respondents has been taken from Bhagalpur city, Bihar. The
investigation uncovers that lion's share of the respondents have arranged choice in obtaining
moment nourishment items. TV assumes a noteworthy part in giving data about moment food
items.
KEYWORDS - Globalization, Modernization, General stores, Indian organizations, Food
Items, Consumers.
INTRODUCTION
The word 'food' alludes to the
concoction substances devoured by people
to keep their body in a sound and dynamic
condition. The human body requires
nourishment for development, repair and
substitution of its well-used out tissues.
Thus, food needs to give the required crude
material, vitality and different substances,
similar to vitamins and for the smooth
working of the body, other than meeting the
calorific necessities like starches, proteins,
fats, and so forth., India is the world's
second biggest maker of nourishment
alongside China and regarded to be
capability of being greatest industry with
food and rural division contributing 32 for
each penny to Indian GDP.
Today, in our kitchen has imperative
place by moment nourishment items. It
involve a true blue rack space in stores and
markets in India. New and high caliber of
moment food items have changed the way
of life of individuals and prompted more
number of Indian organizations enter the
market with verities of moment
nourishment items . Moment nourishment
items spare time and vitality. Guardians can
send the kids to class to class early, go to
office in time and get more opportunity to
include in different exercises. Urban current
ladies try to engage themselves in the
general public as they have advanced
education , better business openings and
great presentation condition that expansion
the requirements at a quicker rate . Moment
food items influence them to cook
whenever with less to work, time and
vitality.
In India, dominant part of
nourishment utilization is still at home.
Hand crafted nourishment items get
uncommon consideration from clients. By
and by, out of home food utilization is
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expanding because of increment in
urbanization, separating of the conventional
joint family framework, want for quality,
time which converts into an expanded
requirement for comfort, expanding number
of working ladies, ascend in per capita
wage, changing ways of life and expanding
level of riches in the center pay amass had
achieved changes in nourishment
propensities.
INDIAN FOOD PROCESSING
INDUSTRY
The nourishment handling industry
in India is one of the biggest as far as
creation, utilization, fare and development
prospects. Imperative sub divisions in
nourishment preparing enterprises are
products of the soil handling, angle
preparing, drain preparing, meat and
poultry handling, bundled/accommodation
food, mixed refreshments and soda pops
and grain preparing.
As indicated by Ministry of Food
Processing Industries, the measure of the
food handling industry was about
Rs.315,000 crores and included Rs.99,000
crore of significant worth included items.
Around 300 million upper and white collar
class individuals expend handled
nourishment; 200 million more customers
are required to move to prepared food by
2010. The nourishment preparing industry
represents 13.5% of the nation's modern
yield. It creates 18% of GDP and utilizes
around 19% of the mechanical work at
national level. Items like papad, pickle and
flavor blends have been colossally fruitful
lately. The span of this specific section
alone is assessed at Rs 100 Crores. Rabo
India Finance had anticipated that the
Indian nourishment preparing industry
would increment to Rs 11,500 billion by
2014-15. Prepared items like 'chapaties',
'subzies' and parcel packs of concentrated
curries are quick getting to be noticeably
consistent weight control plans, particularly
for youthful couples. The item run
incorporates nourishments like 'puri-bhaji'
and 'dosa-vada'. Handled nourishment items
like pickles, chutneys, squeezes and curry
powders had made their entrance into the
kitchens of most middleclass family units
quite a while back. There are an astounding
15 crore white collar class people, of which
60% are underneath 35 years — a section
that is progressively relying upon prepared
nourishments. This tosses open a perfect
open door for little business visionaries who
are looking at this fragment for making a
fortune.
In the course of recent decades,
India has made mammoth strides in
delivering nourishment grains, drain,
products of the soil. The generation of
crude food materials is assessed to worth
over Rs. 60,000 crore. After essential,
optional and tertiary handling, the aggregate
size of the business is evaluated to be as
high as Rs. 1,10,000 crore. This cost
overwhelm mirrors the open doors that food
handling industry offers to the economy in
general and business people in person.
Items centered towards kids and youthful
grown-ups and items obliging the
individuals who lead a quick advanced life.
Understanding the otential and keeping in
mind the end goal to give additionally help,
the administration has exempted from
extract obligation for consolidated drain,
dessert, arrangements of meat, fish and
poultry, pectins, pasta and yeast. Further,
extract obligation on certain prepared to-eat
bundled nourishments is decreased to 8%
from 16%.
The aggregate fares of Indian
nourishment handling industry had
expanded by around three times to
Rs.53,000 crores in 2003-04, from Rs.17,
600 crores in 2002-03. Considering the
more noteworthy potential for food
preparing industry in India, government had
resolved to empower different exercises for
the improvement of this segment. Indian
government had been offering significance
to the food preparing segment, by method
for monetary impetuses to energize
commercialization and esteem expansion of
farming produce, for limiting pre/post reap
wastage, creating business and fare
development. The legislature gave five-year
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charge occasion for new food preparing
units in foods grown from the ground
handling. From 2000-01 to 2006-07
Government had additionally affirmed
recommendations for joint endeavors;
outside coordinated effort, modern licenses
and 100 % send out arranged units
conceiving a venture of Rs.19,100 crores
amid 2012-13. Out of this, remote
speculation was over Rs. 9100 crores.
REVIEW OF LITERATURE
Kamalareni and nirmala (1996),
in their study have portrayed that most of
the instant food products. Most of the
consumers regularly purchase at least three
varieties of food items and they suggest that
the door to door distribution of free sample
is used as a main tool of sales promotion by
the instant food product manufactures.
Kotler and Armstrong (1997),
concluded the consumer purchasing
decisions take place over a period of time.
The overall goal during this decision
process is to evaluate various alternatives
and choose product that satisfies the
consumer in an optimal way.
Consumers get influenced by
several major factors while they make their
decisions. These factors can be grouped as
social, cultural, psychological and personal
factors Schiffman and Kanuk (2000),
defined, following are the main sources of
that influence on Attitude formation. The
formation of consumer attitudes is strongly
influenced by personal experience, the
influence family members and friends,
direct marketing, and mass media. Direct
experience refers the attitudes towards the
product formed by the directly consuming
the product.
Blackett and Robbins (2001),
consistently said that the key drivers of
demand for products are
awareness/familiarity, perceived quality,
sales quality and price. These tool drivers
influence the perception of costumer in
term of decision making.
Svederberg, Eva (2001), revealed
in their study that consumer‗s choice of
food products is based on environmental
issues as well as on issues concerning their
health. Their thinking on nutrition and
health is based on whether the food product
was produced locally or not and on the list
of ingredients. The study also found that
consumer‗s understanding of packed food
label information is low.
Pinya Silayoi, Mark Speece
(2004), conducted an exploratory study on
packaging and purchase decisions and
found visual package elements play a major
role, representing the product for many
consumers, especially in low involvement
and when they are rushed. Most focus
group participants say that they use label
information but they would like it if it is
simplified.
Vasant P Gandhi and Abraham
Koshy (2006), conducted a study to
examine the marketing of wheat in India,
focusing on the private marketing system,
the marketing efficiency and quality. The
study finds that the farmers now almost
invariably sell in the nearby primary market
rather than to village traders, indicating
increasing awareness and mobility. The
study finds that typically, the market
intermediaries provide hardly any special or
value adding services or development, in
return for the commissions and margins,
other than conducting the transactions and
making the payment. The farmers see
considerable scope for improvement in the
marketing system. However, the
commission agent and traders seem
relatively satisfied.
Banumathy and Hemameena, M
(2006), discussed in their study on brand
preference of soft drinks in rural Tamil
Nadu that using Garrets ranking technique,
to rank factors influencing the soft drinks
preferred by rural consumer. They found
that, the product quality was ranked as first,
followed by retail price. Good quality and
availability were the main factors, which
influenced the rural consumers of a
particular brand of a product.
Indumathi et al (2007), in their
study have revealed that occupation of the
women, income of the family and saving
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time while cooking are the most influencing
factors of spicy products. The authors say
that most of the consumers have purchase
200 gm pack of powders and masala, while
small numbers of consumers prefer 100 gm
packets.
Pinya silayoi and Mark Speece
(2007), conducted a study on the
importance of packaging design and the
role of packaging as a vehicle for consumer
communication and branding. The study
investigated the knowledge about consumer
psychology which was important for the
manufacturers to understand consumer
response to their packages. The results of
the study gave some insights of consumer
preferences for food packages in Bangkok
and Thailand, which are fair representatives
of many markets in Asia, Where the
modern urban middle class is rapidly
expanding.
Sushil Kumar and Jabir Ali
(2011), conducted a study for assessing
consumer awareness and usage of food
labels and influences on food buying
behaviour. The results indicated that
particular category of information was used
more by the consumers while purchasing
packaged food products. Differences across
various socio-economic groups were also
significant in many cases. The results had
very strong implications for regulatory
authorities as well as food companies.
Saritha Bahl (2012), has develop a
model to understand the determinants of
consumer behaviour regarding buying
decision. The frequency of consumer‘s
shopping for food products has been
analysed among different occupations.
Efforts have been taken to know the attitude
of the consumers towards food product
labels and their perception about food
safety which has also analysed
STATEMENT OF THE PROBLEM
With advancement, privatization,
globalization and modernization, the cutting
edge aggressive business depends on
understanding the best items and
administrations that he needs. Considering
reality that the purchaser is the lord, each
association needs to build piece of the pie
and benefit. The contenders are likewise
following a similar methodology. It
includes the mental procedures that
customers got past in perceiving needs,
discovering approaches to settle these
requirements, settling on buy choices,
translate data, make arrangements and
execute those plans by taking part in
examination shopping or really acquiring an
item. Buyer conduct is one of the
empowering and testing regions in
advertising examines being a human
movement concentrated on the items and
administrations. Understanding the conduct
of the buyers is an extraordinary test.
OBJECTIVES OF THE STUDY:-
The main objectives of the present
study are mentioned below:-
Main Objectives
1. The study is to identify the customer
purchasing behaviour towards instant
foods.
Secondary Objective
1. To analyse the consumer purchasing
frequency of instant food products.
2. To know the media for selecting the
instant food products.
3. To find out the influencing factors on
instant food products.
4. To study the pattern of purchase of
consumer towards instant food
products.
METHODOLOGY
The research methodology is a way
to systematically solve the research
problem along with the logic behind
them. The various aspects of methodology
adapted in the present study are discussed
below.
The study was conducted in
Bhagalpur city in between 15th August to
15th
November, 2016. 110 respondents from
both genders were randomly selected as the
sample for the study. Retail outlets were
visited in morning, afternoon to ensure
better coverage of all types of consumers.
Convenience sampling technique was used
to collect the data. The survey tool for this
study was a structured survey questionnaire
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method through face-to-face interview by
the investigator.
Along with primary data secondary
data has been also used for the study which
has been collected from various journals
and online sources.
TYPES OF BUYING BEHAVIOR:
Consumer decision making varies
with the type of buying decision. Assail
distinguished four types of consumer
buying behaviour based on the degree of
buyer involvement and the degree of
differences among brand
DESCRIPTION HIGH
INVOLVEMENT
LOW
INVOLVEMENT
Significant
differences
Between
brands
Complex
buying
behaviour
Variety
seeking
buying
behaviour
RESEARCH FINDINGS
On the basis of primary data collected
through structured questionnaire the
following analysis has been done.
Table 6.1: Profile of respondents
Source: Primary data (n=110)
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Interpretation:-
Table 6.1 depicts the personal
profile of the respondents who fall under
different category of age groups,
educational qualification, occupation,
marital status, number of family members,
type of family and family monthly income.
Table 6.2: Duration of usage of instant packaged food products
Source: Primary data (n=110)
Interpretation:-
Table 6.2 portrays the duration of
usage of Instant Packaged food products.
With regard to ready to eat food products,
51.82 per cent of them were consuming
instant packaged food products for 5 - 10
years, 30.91 per cent had been using of
them it for less than 5 years, 10.91 per cent
of them had been using it for 10 to 15 years
and 6.36 per cent of them were using it for
more than 15 years. With regard to ready to
cook food products, 28.18 per cent of them
were consuming it for less than 5 years,
39.10 per cent of them had been using it for
5 - 10 years, 22.72 per cent of them had
been using it for 10 - 15 years and 10 per
cent of them were using it for more than 15
years
Table 6.3: Respondent’s Purchase decision
Source: Primary data (n=110)
Interpretation:-
Table 6.3 states the purchase
decision of the respondents. With regard to
ready to eat food products, 43.64 per cent of
them had planned purchase, 30.91 per cent
of them followed impulsive buying and
25.45 per cent of them decided their
purchase based on the situation/ force. With
regard to ready to cook food products,
56.36 per cent of them had planned
purchase, 31.82 per cent of them followed
impulsive buying and 11.82 per cent of
them decide their purchase according to
situation/ force.
Table 6.4: Frequency of purchase
Source: Primary data (n=110)
Interpretation:-
Table 6.4 outlines the respondent‘s
frequency of purchase of the ready to eat or
cook food products. From the table it is
clearly shown that 31.81 per cent of them
purchase the ready to eat food products
once in a week, 21.81 per cent of the
respondents purchase the ready to eat food
products twice in a week, 14.54 per cent of
the respondents purchase ready to eat foot
products every day, 12.72 per cent of them
purchase the ready to eat food products
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once in a month, 9.09 per cent of the
respondents purchase ready to eat food
products for fortnightly and 10.03 per cent
of them purchase the ready to eat food
products whenever required. 33.64 per cent
of the respondents purchase the ready to
cook food products once in a week, 20.91
per cent of the respondents purchase the
ready to cook food products fortnightly,
16.36 per cent of them purchase the ready
to cook food products twice in a week,
11.82 per cent of them purchase the ready
to cook food products daily, 10.91 per cent
of them purchase the ready to cook food
products once in a month and 6.36 per cent
of them purchase the ready to cook food
products whenever required.
Table 6.5: Source of influence
Source: Primary data (n=110)
Interpretation:-
Table 6.5 describes about the source
of influence for using packaged instant food
products. With regard to ready to eat food
products, 29.09 per cent of the respondents
are influenced to use ready to eat food
products through their children, 24.55 per
cent of them are influenced to use ready to
eat food products through their parents,
17.27 per cent are influenced to use ready
to eat food products through their spouse,
13.64 per cent of the respondents are
influenced to use ready to eat food products
through their friends, 10.9 per cent of the
respondents are self-influenced to use ready
to eat food products, and 4.55 per cent of
them are influenced to use ready to eat food
products through shop keeper.
With regard to ready to cook food
products, 26.36 per cent of the respondents
are self-influenced to use ready to cook
food products, 22.9 per cent of them are
influenced by their parents,18.18 per cent
are influenced to use ready to cook food
products through their friends, 15.45 per
cent of the respondents are influenced
through their children, 12.72 per cent of
them are influenced to use ready to cook
food products through shop keepers and 6.4
per cent of the respondents are influenced
by their spouse to use ready to cook food
products.
Table 6.6: Source of information
Source: Primary data (n=110)
Interpretation:-
Table 6.6 describes about the source
of information regarding ready to eat foot
and ready to cook food products. With
regard to ready to eat food products, it was
found that 70.9 per cent of the respondents
were getting information about the products
through television, 14.54 per cent of the
respondents through radio and 7.27 per cent
of the respondents through newspapers.
Friends/relatives, magazines and
shopkeepers served as the source of
information about the ready to eat food
products for 6.4 per cent, 5.45 per cent and
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4.54 per cent of respondents, respectively.
With regard to ready to cook food products,
it was found that 52.73 per cent of the
respondents were getting information about
the ready to cook food products through
television, 15.46 per cent through friends
and relatives, and 13.64 per cent through
the newspaper. Percentage of the
respondents getting information about the
ready to cook food products through radio
and shopkeepers were the same that is 6.36
per cent and magazines acted as source of
information about ready to cook food
products for 5.45 per cent of respondents.
CONCLUSION
The investigation comes about
uncovered an inspirational viewpoint
towards the moment or Ready to eat food
items and Ready to cook nourishment items
and the request has additionally expanded.
The members had broad consciousness of
the item, and appropriate data wellsprings
of the item. The recurrence of devouring
prepared to eat or prepared to cook handled
food has been ascending with relative
significance of comfort, efficient and a
relative decrease in conventional
nourishment and dietary patterns. This
pattern was more noticeable in youthful
purchasers. Theinvestigation uncovered that
dominant part of the respondents had
arranged choice in buying moment food
items. TV assumed a noteworthy part in
giving data about moment food items.
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M-BANKING: ISSUES AND CHALLENGES IN INDIAN BANKING SECTOR
DR. PAWAN KUMAR PODDAR
Head, University Department of Commerce
& Business Administration &Director,
Directorate of Professional Courses
Tilkha Manjhi Bhagalpur University,
Bhagalpur, Bihar-812007, India
DR. QUAZI MD. KAMRAN
Department of Commerce & Business
Administration,Tilkha Manjhi Bhagalpur
University, Bhagalpur,
Bihar-812007, India
Abstract Banking is the backbone of every industry and technology plays an important role in
every industry. The role of technology is increasing very rapidly day by day, which is also
promoting the banking industry. Mobile banking is a system that helps the customers to
conduct a number of financial transactions with the help of their mobile devices. The
increased prevalence of mobile phones provides exciting opportunities for the growth of
mobile banking (m-banking). Like in any emerging technology, there exist barriers to the
adoption of mobile banking services.
As India is the second largest telecom market in the world and have high potential for
expanding banking services using mobile. Mobile banking has emerged as more convenient
and user friendly form of banking. In this paper, we will share what is mobile banking (m-
banking), advantages of adopting this new technology both for the banking sector as well as
the consumer and issues which needs to be addressed relating to this new form of banking.
This paper looks at various factors which explain why consumers are not using mobile
banking and other technologies in banking. It would also try to suggest why people are not
currently using mobile banking and try to suggest how to overcome this problem and
increase the acceptance levels.
Keywords: Technology, Mobile banking User friendly, Customers, Revolution
INTRODUCTION
Traditional branch-based banking in
India remains the most widely adopted
method of conducting banking transaction,
at same time commercial banks are
undergoing a rapid change majorly driven
by the information & telecommunication
(ITC) technology. ICICI bank pioneered in
mobile banking services in India.
Today many commercial banks have
launched mobile banking reaching out to
customers and providing them with not only
general information about its services but
also the opportunity of performing
interactive retail banking transactions
anytime, anywhere. Banks have changed
from paper-based banking solutions provider
to the latest of the technologies like online-
banking, mobile-banking, etc. At present
banks offers a wide range of services to their
customers such as doing fund transfers,
purchasing stocks, access to account
information etc.
Concept of Mobile Banking
Mobile banking started in 1998 in
Finland where a mobile phone was used for
coco cola and for car parking fee. In Finland
payments and account management products
over mobile GSM phones as SMS service
was available more than a decade ago.
Mobile banking allows you to bank
anytime anywhere through your mobile
phone. You can access your banking
information and make transactions on your
Savings Account, Demat Accounts, Loan
Accounts and Credit Cards at absolutely no
cost. With the new M-Shop facility on
Mobile, you will now be able to recharge
your mobile phone and book movie tickets.
In their simplest form, customers receive
information on their account balances via
SMS. The new WAP- and Java-enabled
mobile phones using GPRS support fund
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transfers between accounts, stock trading,
and confirmation of direct payments via the
phone‘s micro browser.
Rapid increase in the use of mobile
phones has created new opportunities for
banks to use this mode of communication
for banking transactions. Mobile banking
helps in financial inclusion as it‘s difficult to
set up branches in rural and remote areas.
Advantages of Mobile Banking
Mobile banking offers various
advantages to banks as well as customers
Benefits for the banks 1. Reduces transaction cost: Mobile
banking enables banks to reduce cost of
courier, communication, paper works,
etc. It reduces costs in setting up a
branch and the resources to process
transactions.
2. Helps in improving services: as there is a
direct contact between customers and
banks, banks can improve their services
on the basis of customers feedback.
3. Increases customer loyalty: using M-
banking customers need not to go in
banks braches for fund transfer or for
information, which creates a good
relationship between banks and
customers which helps in increasing
loyalty towards the banks.
Benefits for the customers 1. 24x7 hour banking: through mobile
banking, customers has online access to
their bank accounts. Challenges related
to mobile Banking. Customers has no
longer to wait in banks lines of wait for
opening branches
2. Anytime anywhere banking: unlike
traditional banking, consumers can
perform banking transactions at
anyplace.
3. Safe and secure transaction: mobile
banking reduces the risk of fraud. An
SMS is send by bank whenever customer
withdraws money from his/her bank
account. It has secured pin code which is
known by the user, and also has a check
digit without it no one can deposit
money.
REVIEW OF LITERATURE
Barnes and Corbett; Scornavacca and
Barnes (2004) concluded that mobile
banking is a result of recent innovations in
telecommunications that launched new
methods for banking services.
Rugimbana (1995) found that there is vast
potential for mobile banking because of its
anywhere and anytime accessibility.
Clark (2008) suggests that as a Channel the
mobile phone gives consumers more low-
cost self-service options to access funds,
banking information and make payments. It
also delivers convenience, immediacy and
choice to consumers.
Consumers are attracted to these
technologies because of convenience,
increasing ease of use, and in some instances
cost savings (Anguelov et al., 2004).
Bamoriya and Singh (2011) found that the
mobile banking face challenges like mobile
handset compatibility, standardizing,
software downloading, privacy & security.
From Indian perspective Sharma and Singh
(2009) found that Indian mobile banking
users are specially concerned about security
issues like financial frauds, account misuse
and user friendliness.
Comninos et al. (2008) suggested that
consumers will transact electronically if
there is convenience and security in mobile
banking.
Mobile banking has emerged as new
alternative way of banking which is more
convenient and user-friendly than traditional
form of banking. It is covering the concept
of anytime, anywhere banking into reality
(Kaur & Madan, 2013).
Mobile banking is one of the alternative
channels available to customer for quick and
efficient service or anytime and anywhere. It
also studies the various incentives and gain
by the customers with the usage of mobile
banking (Mishra & Sahoo, 2013).
OBJECTIVES OF THE STUDY 1. To understand the concept of mobile
banking.
2. To study the benefits of mobile banking
3. To study the issues related to mobile
banking in India.
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4. To highlight the challenges associated
with mobile banking.
5. To make suggestions on the basis of
research findings
METHODOLOGY The study was conducted to identify
the issues and challenges of mobile banking
and to make suggestions on the basis of
findings of the study. The methodological
approach in this study is exploratory in
nature. Secondary data was used for the
study. Secondary data provided theoretical
background to the research problem.
Secondary sources include journal, books,
internet etc. For the present research, the
paper is based on Exploratory Research. The
major emphasis of Exploratory Research is
on the discovery of ideas.
ANALYSIS
Issues
This papers attempt to explore
various mobile banking issues from users‘
perspective and to alert various parties
involve in mobile banking services viz.
mobile operators, banks, content providers,
aggregators etc. about relevant issues which
could become challenges for them in
providing effective mobile banking services.
Security issues in mobile banking
Mobile banking has two zones, one
is the handset held by the user and the other
is the bank zone. Literature shows that
possibility of security threat exists for
transaction of payment using mobile device.
i) Mobile banking and Security issues
with WAP (Wireless Application
Protocol)
It was noted that it is difficult to
provide end to end security through WAP.
The reason is that the data is not encrypted
at gateway during the switching of protocol
process, which leads to security concern for
mobile banking in WAP.
ii) Authentication Risks and Issues
If the device gets stolen then the
hackers or unauthorized persons may find
the password from the log files or saved
draft files. Many customers save their
password in their mobile or they may keep
the password under auto fill settings of the
form, this loophole can be easily used by the
unauthorized person.
iii) SMS based Mobile banking Today, most of the banks in the
world offer SMS based mobile banking. Due
to plain text property, SMS is not suitable
for authentication. So lacking of privacy,
integrity and security are the main issues
involve in SMS banking.
a) SMS encryption
As default data format for SMS is
plaintext. Currently end to end encryption is
not available. The only encryption involved
at base transceiver station and SMS bank
server during transmission. The encryption
algorithm used is A5 which is proven to be
defenseless.
b) SMS Spoofing Attack
The most dangerous attack in SMS
banking is spoofing attack where attacker
can send messages on network by
manipulating sender‘s number. Due to
spoofing attack, most of the organizations
are not adopting mobile banking through
SMS.
iv) Virus Attacks in mobile banking
Software like Trojan horses can
easily take up password on the web browser
or any cached information on operating
system. Malicious codes are written for
remote communication. Zitmo has been used
by attackers to defect SMS banking. Zeus is
commonly used to steal mobile transaction
authentication number or password.
v) Risk with Digital Signature
To reduce hardware cost, designer
may prefer digital signature. It is founded
that digital signature is computational
intensive. With unsigned values for example
date, amount, they differed from transaction
to transaction. So a signed template can be
used with several unsigned values like date,
amount etc.
Challenges
Economic Challenges: India does possess
some infrastructure in the forms of postal
payments, reasonable transport and local
governments and therefore, it is a big
challenge for bankers to make mobile
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banking inexpensive enough to be attractive
for the end-customer over existing methods.
Regulatory Challenges: Although the RBI
is supportive of mobile banking in India,
there are many regulations that are being put
into place:
i) Restricted to Financial Institutions: The
guidelines state that only existing financial
institutions and banks are allowed to offer
mobile banking. For a very inexpensive
solution, it would have been more effective
to allow non-profit organizations to build
their own MFI without being encumbered by
large existing infrastructure.
ii) Rupee Transactions: All transactions
must be done only in India‘s national
currency, the rupee. While this may not be a
threat in the beginning, this may pose a
constraint for interoperability between
Indian mobile payments and the world.
Also, it excludes providers from the
lucrative remittance market in India and
limits areas from which mobile operators
can be profitable.
iii) Existing Account Holders: The
guidelines also state that only those having a
valid bank account would be allowed mobile
banking. This limits the full potential of
mobile banking to extend micro-credit and
bring banking to the large number of
unbanked customers in India.
Demographic Challenges: India has 18
official languages which are spoken across
the country. The state governments also are
dictated to correspond in their regional
language for official purposes. For a pan-
Indian mobile banking solution, this will be
cumbersome to overcome.
CONCLUSION
Due to smart phones, huge increment is seen
in the banking sector which is offering
customized based applications. As, a result
mobile phones have immense potential of
conducting financial transactions thus
leading the financial growth with lot of
convenience and much reduced cost. There
is also need to generate awareness about the
mobile banking so that more and more
people use it for their benefit.
The major challenge here is to develop
applications which are safe in all respect so
that majority of the consumer use it without
any kind of hesitation. Majority of the
Indian population is still living in rural areas
and therefore immense potential lies before
the banker which is untapped till date. So it
is of utmost importance to make software
that is user friendly and standardization will
make it easier for customer using services of
multiple banks.
The researcher had attempted to explore
selected mobile banking issues from
customers‘ perspective and to make
recommendation to various parties like
banks, mobile operators, content providers,
regulators on relevant issues which could
become challenges for them in providing
effective mobile banking services in the
country.
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Customer adoption of tele-banking
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International Journal of Bank Marketing,
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2. Amir Herzberg. Payments And Banking
With Mobile Personal Devices,
Communications of the ACM,Vol. 46,
No. 5, May 2003.
3. Banzal S. Mobile Banking & M–
Commerce and Related issues, www.
public.webfoundation.org/….... /25,
Mobile_banking_M-
commerce_15.03.pdf, 2010.
4. Barnes,S.J., and Corbitt, B. Mobile
Banking: Concept and Potential,
International Journal of
MobileCommunications, 1 (3), pp. 273-
288, 2003.
5. Black, N. J., Lockett, A., Ennew, C.,
Winklhofer, H. and McKechnie, S.
Modeling consumer choiceof
distribution channels: An illustration
from financial services, International
Journal of Bank Marketing, 20(4),
pp.161- 173, 2002.
6. C. Narendiran, S. Albert Rabara, and N.
Rajendran. Public key infrastructure for
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mobile bankingsecurity, Global Mobile
Congress 2009, pp. 1-6,2009.
7. C. Narendiran, S. Rabara, and N.
Rajendran, ―Performance evaluation on
end-to-end security architecture for
mobile banking system, ‖ Wireless Days,
2008. WD '08. 1st IFIP, pp. 1-5,2008.
8. Comninos, A., Esselaar, S., Ndiwalana,
A. and Stork, C. Towards evidence-
based ICT policy andregulation mobile
banking the unbanked,
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9. Dai Wei and Tang Yanling. Research on
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Business and Information
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10. Gopal, Pandey, Batra (2012). Mobile
Banking in India: Practices,Challenges
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Computer Science and Engineering.
Volume 1, No.2, May – June 2012.
11. Mishra, Sahoo. (2013). Mobile banking
adoption and benefits towards customers
service, Special Issue of International
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2, Issue-1, 2013.
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ANALYTICAL STUDY OF FRUITS & VEGETABLES MARKETING IN PUNE
DISTRICT
NILESH U BANKAR
Research Scholar
Ahmednagar, Maharashtra
DR.J.R.BHOR
Research Guide,
Ahmednagar, Maharashtra
Abstract
Fruits & Vegetables play an important part in having healthy life style. Fruits &
Vegetables in proper balance prevent many diseases. Marketing of fruits & vegetables is
more important as fruits and vegetables are perishable, seasonal and available in bulk. It is
tough job to store the fruits and vegetables easily. Hence its proper marketing needs to be
done. In India fruits & a vegetable marketing is mostly done in weekly bazaars. Majority of
Indian population is based on agriculture as occupation the market of fruits & vegetable is in
large scale. APMC operated taluka wise play an important role in marketing of fruits &
vegetables .There has been concern in the recent years regarding the efficiency of marketing
of fruits and vegetables in India. It is believed that poor efficiency in the marketing channels
and Poor marketing infrastructure is leading to high and fluctuating consumer prices. The
present paper is an attempt to elaborate fruits & vegetables marketing in Pune district.
Keywords: Marketing Efficiency, Marketing, Fruits, Vegetables, Consumer price etc.
Introduction:
India ranks second in the world in the
production of Vegetables and third in
production of fruits. Fruits and vegetable has
gained more importance. Fruits &
Vegetables farming is mostly labour
intensive in India and provide substantial
employment not only in production but
also transportation, processing and
marketing. For developed economies
marketing efficiency of fruits and vegetable
retailing industries is becoming increasingly
important. India's diverse climate ensures
availability of all varieties of fresh fruits &
vegetables. There are certain problems faced
by the farmers, wholesalers, retailers and
customers in fruits & vegetable marketing.
Like inappropriate estimation of market,
fluctuation in demand & supply, price
uncertainty, mismatch between production
cost & selling cost. There are also the
problems faced like availability of
infrastructure, finance and credit supply on
time, improper logistic channels. The big
challenge is to have proper balance with
existing intermediaries. Fruits & vegetables
marketing have a huge opportunity with
respect to Pune district. By having proper
distribution channel the fruits and vegetables
marketing efficiency can be increased.
Objectives:
1. To study fruits & vegetables marketing
in Pune district.
2. To identify problems faced by
stakeholders, fruits and vegetables
marketing problems and suggest suitable
strategies.
3. To study the factors influencing the
marketing cost, market margin and
marketing efficiency.
Hypotheses of the study:
1. There is tremendous fluctuation in Fruits
and Vegetables market price.
2. Marketing efficiency and profitability
can be enhanced by proper marketing
channel of fruits & vegetables.
3. Producers are unable to make
appropriate marketing price estimation.
4. There is collusion among traders of fruits
& Vegetables.
Scope of the study:
Geographical scope- Research work
is related with Pune district only.
Selected Fruits : 1. Pomegranate. 2. Guava
Selected Vegetables : 1.Brinjal 2.Tomato
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Limitations of the study:
1. Study is related with selected Pune district only.
2. Study is related with selected fruits & vegetables and other are not covered.
Research Methodology:
a) Primary data – Primary data is gathered from small retailers, wholesalers and farmers.
Structured questionnaire is prepared and it is filled up by 200 farmers, 30 wholesellers & 60
retailers.
b) Secondary Data – Secondary data is gathered mainly from research articles, reference
books on Fruits and vegetables vegetable retailing and retail management, research journals,
publications, reports, websites, records from Agriculture Universities and APMC .
c) Population
Population for the study refers to the entire group of farmers, wholesellers. Retailers APMC
related with production and marketing of fruits & vegetables Pune District.
d) Selection of Sample –
i) Selection of District:
Pune district has been selected.
Sr.No Name of the District Selected Area Covered
under Fruits (Ha.)
Area Covered under
Vegetables (Ha.)
1 Pune 28551. 25672
(Source: Report of the Joint Inspection Team for their visit to Maharashtra during 27th May
to 3rd June, 2015 to review National Horticulture Mission Progress & District Profiles)
Justification for selection of District: Selected district have more area under fruits &
vegetable cultivation
ii) Selection of Taluka and APMC:
Sr.No Selected District Selected Taluka Selected APMC
1 Pune Khed Khed
Junnar Junnar(Narayangaon)
Justification for selection of Talukas & APMC: Selected Talukas have more area under
cultivation for selected fruits & vegetables.AS the selection of Taluka is done its APMC is
selected.
iii) Selection of Fruits and Vegetables Producer:
Sr.No Selected
District
Selected
Taluka
Fruit
Growers
Vegetable
Growers
1 Pune Khed 30 70
Junnar 30 70
Justification for selection of Fruit & vegetable Growers: Simple random & convenient
sampling method is used for the selection of fruits & vegetables farmer in selected talukas.
iv)Selection of wholesellers & Retailers:
Sr.
No
District Taluka Fruit
Wholeseller
Vegetable
Wholeseller
Fruit
Retailer
Vegetable
Retailer
1 Pune Khed 5 10 10 20
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Junnar 5 10 10 20
Justification for selection of wholesellers & retailers: Convenient sampling method is
used for selection of wholesellers & retailers for fruits & Vegetables.
f) Techniques of Analysis:
Questionnaire is used to collect the data from respondents. Several questioning techniques is
used to design questionnaire. The study has employed five point Likert scaled questions,
multiple choice rating questions, dichotomous questions, close ended questions and single
answer questions respectively. Excel and SPSS is used for data analysis.
Findings:
1. 95% Farmers are male & 5% farmers are
female. This shows that majority of
farmers are male.25% belongs to age
category of 18-35, 38% to 36-45 and 37
% above 46 years. This indicates that
majority of farmers from age group
above 36 yrs.60% Farmers are
undergraduate followed by 32% graduate
& 8 % post graduate indicating that the
literacy level in farmers is very poor.
2. 58% of irrigation is through flow, 15%
by sprinkler & 27 % by drip. This
indicates poor awareness about proper &
efficient irrigation method
3. 65% family members work as the labour
in filled & 35 % farmers utilize the paid
labour. This misleads poor calculation of
variable cost.
4. 82% farmers are not aware about
changing marketing practices. This
indicates the inefficient use of proper
marketing practices by farmers.
5. 100% farmers agree that pricing method
of fruits and vegetable is wrong as price
is governed by buyer and not seller. This
leads to the wrong estimations of price &
profit.
6. 94 % farmers agree that inability to
maintain stock is the major problem.
This indicates that poor infrastructural
facilities are available with high cost.
7. 78 % said low investment, 82% said
difficulties in getting returns from trades,
41% competition from other farmers,
74% said increased electricity rate, 16 %
said increased bank interest rates, 88%
said price estimation, 74% said credit
facility, 36 % said natural calamities, 63
% said demand estimation, 82%
exploitation by traders, 73 % said
transport charges and 26% said non
cooperation from Government officials
are the major problems faced by farmers.
8. 14% farmers sell their produce in weekly
markets, 16 commission agents, 18%
wholesellers, 2% export agencies, 36 %
in nearest APMC and 14% to retailer.
This indicates the farmers are not aware
of proper marketing channel.
9. 33% farmers say that they receive
payment after more than two days, 27%
Say two days, 27% say after one day and
12 % say that they receive payment on
same day. This indicates that the
payment system is not standardized and
regulated.
10. 42% farmers says profit margin is below
10%,42 % say between 11-20%,10% say
between 21-30%,5% say between 31-
40% and 1% say it‘s more than 40%.This
indicates the profit share of farmers is
very low and unpredictable.
11. 53% farmers agree that fruits are more
profitable, 25% say vegetables and 3 %
say other crops are more profitable. This
indicates the big reforms are needed to
increase the profitability in vegetables &
fruits.
12. 887% farmers say that there is no impact
of government policies on farming of
fruits & vegetables. This indicates that
awareness among farmers regarding
govt, policies is poor and need to be
enhanced.
13. 100% farmers agree that they do not get
the estimated price. This indicates that
estimation is poor and pricing method is
faulty.
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14. 98% farmers say traders policies, 83%
say faulty distribution channel,70% say
Government policies, 40% say excess
production & 21% say natural calamities
are the reason for not getting estimated
price.
15. 76 % farmers are not satisfied with role
of APMC in selling fruits & 84%
farmers are not satisfied with role of
APMC in selling vegetables. This
indicates that the role of APMC is
inefficient in protecting farmer‘s interest.
16. 94% farmers agree that there is collusion
among traders. This indicates the serious
threat for efficient marketing system for
farmers.
17. 86% farmers say government does not
have control over traders. This indicates
the legal amendments in rules for traders
and APMC and their serious
implementation is needed
18. 76 % retailers said marketing industry is
going through structural change,61.1%
said system change is there and 82% said
marketing industry changing in terms of
service,93% retailers agreed that now
customers are having more options,86%
said customers taste is changing, 76%
said customers beliefs are changing and
53% said there is change in customers
loyalty. It states that customer behavioral
pattern is changing.
19. 83 % retailers say that marketing of
fruits and vegetable have change in and
as impact on business. terms of less
pace,87% say ambience, 72% say credit
facility, ,65% say parking facility,73%
say variety of commodity and brand,81%
say proximity93% say relationship with
retailers,82 say sale in loose
quantity,92% say place ,78% retailers
say billing system,88% say credit card
system,62% say costlier commodity
price,64% say multiple counters,89% say
supporting staff,88 % say delivery
facility,67 % say discount facility & 89%
say advertisement does not have impact
on business. From this it can be
concluded that retailers need to be made
aware of changing marketing practices
thoroughly.
20. 44% retailers agree that margin of profit
is more than 40%,30% say it is between
31-40%, 19 % say it is 21-30% & 7%
say it is between 11-20%
21. 66% retailers say that prices are not as
per estimation, while 44% retailers say
that prices are as per estimation.
22. 70% retailers said there is no role of
APMC in price control while 30% said
APC as the role in price control.
23. 93% retailers agreed that distribution
channel as impact on profit & 7% say
that there is no impact of distribution
channel on profit.
24. 77% retailers agree that the pricing
system of fruits & vegetables is not
correct and 33% say it is correct.
25. 87% wholesellers are aware of changing
trade practices of fruits & vegetables
marketing.
26. 93% wholesellers agree that customer
behavior is changing in terms of taste,
90% say in terms of loyalty and 77% say
it is changing in terms of belief.85%
wholesellers agree that wholesale trade is
going change in terms of services, 80%
in terms of systems & 70% in terms of
structure.
27. 10% wholsellers strongly disagreed and
90 % strongly agreed that discount given
affect business.
28. 13% wholsellers strongly disagreed and
87 % strongly agreed that stock
maintenance affect business.
29. 87% wholsellers say that variety of fruits
& vegetables as impact on their business.
30. 47% farmers agreed that their profit
margin is above 40%, 20% said it is
between 21-40, 28% said it is between
21-30% and 5% said it is between 11-
20%
31. 82% wholsellers say prices are as per
their estimation while 18% denied.
32. 72% wholesellers say that govt policy
has an impact on business while 28% say
there is no any impact of Govt. policy.
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33. 68% wholsellers say that APC facilities
are not upto the mark, 25% say it is good
while 7% say it is very good.
34. 75% APMC members says traders
policy, 67% say wrong estimation by
farmrs,67%say government policy,58%
say demand supply imbalance & 50%
say perishable nature of commodity is
the major reason for price fluctuation.
35. 100% APMC members said that
government should decide the pricing
policy, 83% said free storage facility for
farmers and 75% said there should be
strict guidelines for traders from
government.
36. 100% APMC members said most
common charges paid by farmers are for
labour, weighing, commission and 34%
said for warehouse charges are paid.
37. 100% APMC members say there is
impact of distribution channel on pricing
& Profit
38. 100% APMC members say that trader‘s
margin is more than 40%. & 75% APMC
members say that farmers margin is
below 20% and 25% APMC members
say it is between 20-40%.
39. 100% APMC members agree that price
dependency is on traders policy.83% say
on quality, 75% say on demand &
supply. While 100% APMC member
agree that price does not depend on
producer‘s policy.
40. 100% APMC member agree that there is
collusion among traders.
41. APMC members suggest that farmers
should encourage contract framing or
group farming. They should take
trainings on forecasting demand. They
should plan the production schedule
rather than following everyone. They
should try to be present in APMC during
auction as majority farmers send the
produce and come to collect receipts.
Suggestions:
1. Farmers should be made aware about
proper marketing channels. This will
increase marketing efficiency. Share of
farmer in consumer rupee needs to be
increased by various initiatives.
Government needs to take special
initiative in this regards through state
marketing board.
2. Young qualified force should be
attracted by launching new schemes fro
educated and young farmers.
Professionalism will increase by this.
Pensions system can be implemented in
agriculture sector.
3. The operational & maintenance cost can
be cut down by group farming and
contract farming. Infrastructural facilities
for fruits & vegetables must be
completely provided by Government in
order to tackle the problem of storage &
pershability of fruits & vegetables.
4. Initiatives to train farmers in having
proper accounting will help them in
tracking the production cost efficiently.
5. Markets at micro level need to be
established with cold storage and
infrastructural facilities for drying,
processing, grading, storing, weighing,
packaging, labeling & financing.
Farmers should be made aware about the
benefits in trading through APMC.
6. Special horticultural and agricultural
trainings need to be provided to farmer‘s
family to increase skills in order enhance
the efficiency. State Agriculture
Marketing Board has to take initiative in
making famers aware about changing
marketing practices. This will help in
efficient use of proper marketing
practices by farmers.
7. Forward & backward linkages, Future
trading and specially input – output
linkage needs of restructuring in the
changing environment of agricultural
marketing to increase share o farmer in
consumer rupee. APMC needs to take
strict initiative against collusion of
traders to avoid the exploitation of
producers.
8. Facilities of APMC need to be reviewed
and further modification has to be
considered to increase satisfaction level
of its stake holders. Government should
make efforts to provide physical
facilities in and around the markets
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including storage, transport, processing
leading in hindering the intermediaries in
taking advantages from the situation.
9. Standard pricing policy for agriculture as
to be prepared to have efficient
distribution of consumer rupee among
various stake holders. The price
determining factor is traders policy this
as to be shifted to producer policy
considering the volatile nature of
agriculture environment. Branding of
fruits and vegetables should be initiated.
10. The online services can add in the value
of fruits & vegetables marketing in large
extent. Selection of proper channel of
distribution yields more profit.
11. Fruits & vegetables market is going
through change in terms of customer,
structure, system & service. Farmers and
traders need to be made aware and
trained to sustain in this changing
marketing environment. Framers need to
be provided knowledge about marketing
cost, marketing margin and marketing
efficiency and its estimation.
Government has to take initiative in this
with various institutions.
12. Agricultural universities & marketing
boards. Should take initiative in
designing channel of distribution for
fruits and vegetables. They can help
farmers need to plan their produce
according to market and for these the
extensive farmer training has to be taken
in hands with various Government &
private institutions.
13. Fluctuating market prices can be
controlled with support price policies if
implemented properly and efficiently.
Training for the appropriate price
estimation is the biggest call of hour and
it has to initiate. Collusion has to be
developed between producers and traders
through various training programs and
APMC acting as mediator in it.
14. The APMC must setup infrastructure
with international standards in this era of
liberalization, privatization and
globalization.
Conclusion:
Increase in literacy of consumer fruits &
vegetables industry is in boom and through
drastic change. There is change in
customers‘ behavioural pattern and
consumption pattern which has changed the
scenario of retail industry. The share of
producer in consumer rupees is hardly 8-15
percent which on other side is above 85% of
the intermediaries. This states the need of
reforms in fruit & vegetables retail industry
in order to avoid exploitation of producer.
Problems like availability of infrastructure
finance and guidance is restricting them to
select proper marketing channel. Labor
needs to be managed properly and
efficiently. Efficiency of marketing of fruits
& vegetables is hampering due to lack of
awareness about marketing environment
among producers. In these lights of
marketing reforms the problems of fruits and
vegetables marketing are studied in this
research and tried to overcome with some
suggestions. Producers share as to be
increased in the consumer rupees with
proper marketing strategies. Government has
to play a major role in increasing the
marketing efficiency and solve the problems
of producer and other intermediaries. This
study has definitely found need of modern
and redefined research tools and
methodology in field of Agricultural
marketing. Researcher is very much sure that
these suggestions will improve the efficiency
of Marketing of fruits & vegetables.
Government has to play a lead role in this
with the help of State Agriculture marketing
Board and APMC with the private
institutions.
References:
1. Kohls, R. U. (1967). Marketing of
Agricultural Products. New York:
Macmillan Publishing Company.
2. Kothari, C. (2013). Research
Methodology: Methods and Techniques.
New Delhi: New Age International.
3. Kotler, K. K. (2011). Marketing
Management. New delhi: India pvt Ltd.
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4. Kotler, P., & Keller, K. (2016).
Marketing Management. Noida: Pearson
India.
5. Nanaware, S. N. (2013). An analytical
study of e marketing practices of agro
products. Savitribai Phule Pune
University.
6. Nutrition, N. I. (2006). Diet and
nutritional status of population and
prevalence of hypertension among adults
in rural areas. Hyderabad: National
Institute of Nutrition.
7. Ohen, S. B., Umeze, G. E., & Inyang, E.
(2014). Consumer Purchasing
Behaviourfor Fruits and Vegetables
among Civil Servants in Essien Udim
Local Government Area Akwa Ibom
State, Nigeria. Food Science and Quality
Management, 55-60.
8. Omidi, N. M. (2011). Agricultural
Marketing Challenges and Barriers in
Iran . African Journal of Business
Management, 13580-81.
9. Piali, H., & Simayan, P. (2011). Need for
Paradigm Shift to Improve Supply Chain
Management of Fruits & Vegetables in
India ,. Asian Journal of Agriculture and
Rural Development, 25-35.
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FORENSIC ACCOUNTING AND FRAUD INVESTIGATION
CA MOTILAL B. BHAVNANI
CFO At Synergy Lifestyles Private Limited
201 Sona Apartment GOL Maidan Ulhasnagar, Maharashtra.
ABSTRACT Fraud is an activity that takes place in a social setting and has severe consequences
for the economy, corporations, and individuals. It is an opportunistic infection that bursts
forth when greed meets the possibility of deception. The fraud investigator is like the
attending physician looking and listening for the signs and symptoms that reveal an outbreak.
The Association of Certified Fraud Examiners(ACFE) defines occupational fraud as: “The
use of one‟s occupation for personal enrichment through the deliberate misuse or
misapplication of the employing organization‟s resources or assets.”. Since the subject of this
article is Forensic Accounting and Fraud Investigation, we then outline the nature of
workplace fraud through a look at the Forensic accounting. We complete the tour with a look
at the motives of fraudsters and the consequences of their acts. Although forensic accounting
involves performing a wide range of activities, in general, it can be divided into two broad
areas. Investigative accounting and Judicial support. As part of the investigative accounting
there may appear Financial Crime examination and Independent forensic audit while judicial
support refers to consulting services, expertise and other services. Forensic Accounting helps
in unearthing frauds perpetuated by an entity and acts as an instrument which reduces their
occurrences.
Keywords - Forensic Accounting, Scope of Forensic Accounting, Steps in Forensic
Accounting, Frauds, Ingredients of Frauds, Types of frauds, Consequences of fraud, Fraud
Triangle
INTRODUCTION: -
When times are good, people steal,
when times are bad, people steal more‖. In
the first decade of the twenty-first century,
the news has been filled with reports on
frauds and indicators that it is increasing in
its scope and costs to the major economies
of the world. Almost everyone has read
about corporate financial statement frauds
such as Enron and WorldCom, Satyam
Scam, 2g Spectrum, Common Wealth
games or frauds against the government
such as false claims following Katrina, or
huge Ponzi schemes such as the Madoff
scam that set a record for losses associated
with a fraud. Many people have been
directly affected by identity theft. The
economic downturn that began in 2008 has
made it hard to rebound from such losses.
To make matters worse, reports on
activities related to fraud bear bad news.
Fraud is a worldwide phenomenon that
affects all continents and all sectors of the
economy. Fraud encompasses a wide-range
of illicit practices and illegal acts involving
intentional deception or misrepresentation.
According to Association of Certified Fraud
Examiners (ACFE), fraud is ―a deception or
misrepresentation that an individual or
entity makes knowing that
misrepresentation could result in some
unauthorized benefit to the individual or to
the entity or some other party.
Fraud cheats the target organization
of its legitimate income and results in a loss
of goods, money and even goodwill and
reputation. Fraud often employs illegal and
immoral or unfair means.
The fraud involving persons from
the leadership level or known under the
name ―managerial fraud‖ and the one
involving only entity‘s employees is named
―fraud by employees‘ association.
Fraud is a legal and not an
accounting concept. For this reason, the
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accountants have traditionally chosen to
treat it as a concept alien to them.
Fraud evokes a visceral reaction in
us. It is an abuse of our expectation of fair
treatment by fellow human beings. Beyond
that, it is a blow to our self-image as savvy
managers capable of deterring or detecting
a fraudulent scheme. Whether we react
because of values or because of vanity,
nobody likes to be duped. Many elements
of modern society are focused on
maintaining an environment of fair dealing.
Laws are passed; agencies are established to
enforce them; police are hired; ethics and
morals are taught in schools and learned in
businesses; and criminals are punished by
the forfeiture of their ill-gotten gains and
personal liberty—all with a view to
deterring, detecting, and punishing fraud.
The profession of auditing grew out of
society‘s need to ensure fair and correct
dealings in commerce and government. One
of the central outcomes of fraud is financial
loss. Therefore, in the minds of the
investing public, the accounting and
auditing profession is inextricably linked
with fraud deterrence, fraud detection, and
fraud investigation. This is true to such an
extent that there are those whose perception
of what can be realistically accomplished in
an audit frequently exceeds the services that
any accountant or auditor can deliver and,
in terms of cost, exceeds what any business
might be willing to pay .In the past few
years ,public anger over occurrences of
massive fraud in public corporations has
spawned new legislation, new auditing
standards, new oversight of the accounting
profession, and greater penalties for those
who conspire to commit or conceal
financial fraud.
FORENSIC ACCOUNTING: -
The integration of accounting,
auditing and investigative skills yields the
specialty known as Forensic Accounting.
"Forensic accounting" provides an
accounting analysis that is suitable to the
court which will form the basis for
discussion, debate and ultimately dispute
resolution. Forensic Accounting
encompasses both Litigation Support and
Investigative Accounting. As Forensic
Accountants, they utilize accounting,
auditing and investigative skills when
investigating. Forensic Accountants are
trained to look beyond the numbers and
deal with the business reality of the
situation. Now in 21st century, Forensic
accounting has come into limelight due to
rapid increase in financial frauds and white-
collar crimes. Fraud was something the
internal or external auditors were supposed
to guard against through their periodic
audits. Now, the accountants know that
auditors can only check for the compliance
of a company's books to generally accepted
accounting principles, auditing standards,
and company policies. Thus, a new
category of accounting was needed to detect
the fraud in companies that suspected
fraudulent transactions. This area of
accounting is known as 'forensic
accounting' Forensic Accounting is a
simply analysis of evidences. Forensic
accounting is the specialty practice area of
accounting that describes engagements,
which result from real or anticipated
litigation. The word forensic accounting can
be divided into two parts –
1. Forensic means relating to, or used in
courts of law or public debate or
argument.
2. Accounting means language that
provides information about the financial
position of an organization.
According to American Institute of
Certified Public Accountants (AICPA):
―Forensic accounting is the application of
accounting principles, theories and
disciplines to facts or hypothesis at issues in
a legal dispute and encompasses every
branch of accounting knowledge.
SCOPE OF FORENSICACCOUNTING:
A large part of forensic accounting
work relates to fraud detection and fraud
investigation. Forensic accountants are
asked to take up assignments related to
disputes, financial crimes, corrupt practices,
business leakages and siphoning of funds,
whistleblower complaints of any kind and
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many other situations where any
wrongdoing is suspected.
Forensic accountants can be
appointed by corporate management; third
parties effected in any situation, bankers, or
even under the law or by government
agencies.
A Forensic Accountant is expected
to be able to perform all the tasks that an
accountant and an auditor is able to
perform. In addition, he should have in his
team, reasonable expertise in interviewing,
interrogation, data mining and investigative
analysis, field investigation, computer
forensic and handwriting and specimen
signature analysis
STEPS IN FORENSIC ACCOUNTING:
The broad steps in Forensic Accounting
are as under
1. Establishing a clear mandate outlining
specific objectives and deliverable,
2. Data and Evidence collection,
3. Data Analysis,
4. Evaluation of all data and evidence
collected,
5. Reporting.
INGREDIENTS OF FRAUD: -
There are four elements to any fraud
1) A false representation of a material
nature (either misstatement or omission
of material fact).
2) Scienter: Knowledge that the
representation is a false or reckless
disregard for truth.
3) Reliance: The person receiving the
representation has reasonably and
justifiable relied on it.
4) Damages: such receiving party has
sustained financial damages on account
of the above.
Organizations of all types and sizes
are subject to fraud. On a number of
occasions over the past few decades, major
public companies have experienced
financial reporting fraud resulting in
turmoil in the capital market, a loss of
shareholder value, and in some cases the
bankruptcy of the company itself.
Financial statement fraud was a
contributing factor to the financial crisis
and it threatened the efficiency, liquidity
and safety of both debt and capital markets.
Frauds have increased uncertainty and
violability in financial markets, shaking
investor confidence worldwide. It also
reduces the creditability of financial
information that investors use in the
investment decisions. Taking into account
the loss of investor confidence as well as
reputational damage and potential fines and
criminal actions, it is clear why financial
statement should be every manager‘s worst
fraud related nightmare.
WHO COMMITS FRAUD?
Generally, there are 3 groups of
business people who commit financial
statement fraud. They range from senior
management CEO, CFO, Mid and lower
level management and organizational
criminals CEOs and CFOs commit
accounting frauds to conceal true business
performance to preserve personal status and
control and to maintain personal income
and wealth
Mid and lower level employees
falsify financial statements related to their
area of responsibility (subsidiary, division
or other unit) to conceal poor performance
and/or to earn performance based bonuses.
Organizational criminals falsify
financial statements to obtain loans or to
inflate a stock they plan to sell in a ―pump
an dums‖ scheme.
While many changes in financial
audit processes have stemmed from
financial fraud or manipulation history and
related research repeatedly demonstrates
that a financial audit simply cannot be
relied upon to detect fraud at any significant
level.
CONSEQUENCES OF FRAUDS: -
Fraudulent financial reporting can
have significant consequences for the
organization and its stakeholders as well as
for public confidence in the capital markers
Fraud is an issue that all organisations may
face regardless of size, industry or country.
If the organisation has valuable property
(cash, goods, information or services), then
fraud may be attempted. It is often high-
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profile frauds in large multi-national
organisations that are reported on in the
media and smaller organisations may feel
they are unlikely to be a target of fraudsters.
However, according to the ACFE report,
small businesses (classified as those with
less than 100 employees) suffer fraud more
frequently than large organisations and are
hit by higher average losses. When small
companies are hit by large fraud losses,
they are less likely to be able to absorb the
damage than a larger company and may
even go out of business as a result.
The results of PwC‘s survey showed
that companies reporting fraud were spread
across many industries, with at least a
quarter of the respondents in any one
industry suffering from fraudulent
incidents. Industries suffering the highest
average losses were insurance and
industrial manufacturing. Losses in the
financial services industry, a sector
frequently in the press and one with which
fraud is often associated, were below
average. Even not-for-profit organisations
are not immune to fraud, with government
institutions and many charities falling
victim to unscrupulous fraudsters. As one
director working in the international
development and aid sector has pointed out,
‗In my sector, fraud is not a possibility, it is
a reality and we are always dealing with a
number of suspicious incidents on a
permanent basis.‘ PwC‘s survey also
revealed that incidences of fraud were
highest in companies in North America,
Africa and Central and Eastern Europe
(CEE), where more than half of the
companies reported fraud. It was lowest in
the Western European region, although the
UK was much higher than the average for
this region, with levels of fraud similar to
those in CEE. The EIU poll commissioned
by Kroll in 2007 found that respondents in
countries such as India and China have seen
a significant increase in the prevalence of
corporate fraud in the last three years and
this trend is likely to increase in businesses
operating in emerging markets. Although
fraud is prevalent across organisations of all
sizes and in all sectors and locations,
research shows that certain business models
will involve greater levels of fraud risk than
others. The control environment should be
adjusted to fit with the degree of risk
exposure.
THE FRAUD CYCLE: -
The fraud cycle essentially begins
with the plans of the fraudster leading up to
the committing of the fraud act. Once
committed, the fraudster converts the asset
to cash, if necessary, and conceals the
fraud. The existence of a fraud usually
comes to light through
(1) an allegation, complaint, or a rumor of
fraud brought by a third party (a disgruntled
supplier or a fellow employee);
(2) an investigator‘s intuition or general
suspicion that something is awry;
(3) an exception from an expectation of a
person senior to the suspect (an
unacceptable condition, profits, sales, costs,
assets, or liabilities are too low or too high);
(4) the accidental discovery that something
is missing—cash, property, reports, files,
documents, or data;
(5) results from an audit;
(6) results of controls, especially antifraud
controls.
Based on the statistics from the
ACFE‘s RTTNs, an average of about 60
percent of all frauds reported were
discovered either by a tip or accident,
indicating the need for more effective
proactive detection methods such as
internal controls and internal audits. A
fraud investigation is of necessity based on
legal factors, because any fraud may end up
in a court of law. The immediate facts to
determine are whether a fraud has occurred
and whether there is: (1) a criminal law, (2)
an apparent breach of that law, (3) a
perpetrator, and (4) a victim.
The six basic steps in the fraud
investigation are:
1. Acquire all available details and
documents relating to the allegation.
2. Assess the allegation against the
available documentation.
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3. Assess the corporate environment
relative to the person in question.
4. Ask whether a theory of fraud can be
developed at this stage. Is there motive and
opportunity?
5. Determine whether the available
evidence makes sense. Does it meet the test
of business reality?
6. Communicate with appropriate parties on
the details and status of the fraud.
After performing these steps, two
possibilities exist. Either one has identified
the fraudster and knows who he/she is, or
one has not. If not, more investigation is
necessary. But if one does identify the
fraudster, the process becomes critical to
what is no longer an investigation, rather a
pursuit of legal action. Evidence gathered
may consist of the testimony of witnesses,
documents, items (means and instruments,
or fruits of the crime), and possibly the
confession of the perpetrator. Experienced
fraud investigators know what evidence is
needed to prove the crime and how to attain
that evidence. Typically, interviewing the
alleged, or known, fraudster is done only
after competent and sufficient data have
been gathered, assessed, and reasoned. If
prosecution of a civil or criminal charge is
sought, evidence must be presented in
court—which is where the expert witness
skill of a forensic accountant or fraud
auditor is valuable. The court, trier of fact,
then resolves the charge of fraud ending the
fraud cycle. A successful prosecution needs
someone who can explain, in lay person‘s
terms, the records, data, documents,
financial information, and files supporting
the prosecutor‘s position. Every fraud has
its own unique wrinkles. All thieves do not
think alike. They tend to be opportunists.
Given a set of circumstances that allow
them to steal, they take the easiest way,
usually weighing risks and rewards
carefully. Culprits usually leave trails and
sometimes make mistakes. Auditors must
learn to look for these signs, or red flags, as
they will be referred to in this book. While
each fraud is different in some ways, they
all have some similarities.
TYPES OF FRAUD: -
Fraud can mean many things and
result from many varied relationships
between offenders and victims. Examples
of fraud include:
a. crimes by individuals against
consumers, clients or other business
people, e.g. misrepresentation of the
quality of goods; pyramid trading
schemes
b. employee fraud against employers, e.g.
payroll fraud; falsifying expense claims;
thefts of cash, assets or intellectual
property (IP); false accounting
c. crimes by businesses against investors,
consumers and employees, e.g. financial
statement fraud; selling counterfeit
goods as genuine ones; not paying over
tax or National Insurance contributions
paid by staff
d. crimes against financial institutions, e.g.
using lost and stolen credit cards;
cheque frauds; fraudulent insurance
claims
e. crimes by individuals or businesses
against government, e.g. grant fraud;
social security benefit claim frauds; tax
evasion
f. crimes by professional criminals against
major organisations, e.g. major
counterfeiting rings;
g. mortgage frauds; ‗advance fee‘ frauds;
corporate identity fraud; money
laundering
h. e-crime by people using computers and
technology to commit crimes, e.g.
phishing; spamming; copyright crimes;
hacking; social engineering frauds.
WHY DO PEOPLE COMMIT FRAUD?
There is no single reason behind
fraud and any explanation of it needs to
take account of various factors. Looking
from the fraudster‘s perspective, it is
necessary to take account of:
a. motivation of potential offenders
b. conditions under which people can
rationalise their prospective crimes
away
c. opportunities to commit crime(s)
d. perceived suitability of targets for fraud
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e. technical ability of the fraudster
f. expected and actual risk of discovery
after the fraud has been carried out
g. expectations of consequences of
discovery (including non-penal
consequences such as job loss and
family stigma, proceeds of crime
confiscation, and traditional criminal
sanctions)
h. Actual consequences of discovery.
THE FRAUD TRIANGLE: -
A common model that brings
together a number of these aspects is the
Fraud Triangle. This model is built on the
premise that fraud is likely to result from a
combination of three factors: motivation,
opportunity and rationalisation.
1. Motivation - In simple terms,
motivation is typically based on either
greed or need. Stoy Hayward‘s (BDO)
most recent Fraud Track survey found
that greed continues to be the main
cause of fraud, resulting in 63% of cases
in 2007 where a cause was cited. Other
causes cited included problems from
debts and gambling. Many people are
faced with the opportunity to commit
fraud, and only a minority of the greedy
and needy do so. Personality and
temperament, including how frightened
people are about the consequences of
taking risks, play a role. Some people
with good objective principles can fall
into bad company and develop tastes for
the fast life, which tempts them to
fraud. Others are tempted only when
faced with ruin anyway.
2. Opportunity - In terms of opportunity,
fraud is more likely in companies where
there is a weak internal control system,
poor security over company property,
little fear of exposure and likelihood of
detection, or unclear policies with
regard to acceptable behaviour.
Research has shown that some
employees are totally honest, some are
totally dishonest, but that many are
swayed by opportunity.
3. Rationalisation - Many people obey
the law because they believe in it and/or
they are afraid of being shamed or
rejected by people they care about if
they are caught. However, some people
may be able to rationalise fraudulent
actions as:
4. necessary – especially when done for
the business
5. harmless – because the victim is large
enough to absorb the impact
6. justified – because ‗the victim deserved
it‘ or ‗because I was mistreated.‘
OBJECTIVES: -
The objective of this article is to
know about Fraud and Forensic Accounting
and Forensic Auditing Techniques which
control the fraud related activities and save
on the financial leakages.
HYPOTHESIS: -
Knowledge and understanding of
the elements of Fraud and strong internal
forensic accounting control the financial
loss incurred due to Frauds. Study of
Forensic Audit and Forensic accounting
helps corporate and other business houses
in the Risk Management and thereby it
becomes helpful in the right operational
management of Business which are clean in
their operations and does not allow seeds of
fraud which causes non-productive use of
scares financial resources.
RESEARCH METHODOLOGY: -
1) Data Collection and Measurement
Primary Data: The data available from
various sources, in some case based on
interviews with the people involved
shall be assembled and analyzed. The
data will be presented in such a form to
derive conclusions and substantiate
findings of secondary data.
Secondary Data shall be collected from
various journals, web sites and RBI and
other statutory bodies guidelines issued
from time to time
2) Tabulation and presentation of Data
3) Analysis
4) Drawing Conclusions
5) Expected Results of the study
EXPECTED CONTRIBUTION: -
It must be recognized that the
complexities of the business world and the
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ingenuity of high educated white-collar
criminals will always manage to produce
schemes that unfortunately go undetected
until they reach significant proportions. The
Forensic Accounting investigators will
investigate, prosecutors will convict, and
the regulator will react with new and more
requirements. However, fraud will persist.
The study will help in analyzing various
aspects of Forensic Accounting and Fraud
Investigation. The fraud will be contained
and managed effectively through the tools
of Forensic accounting and forensic
auditing
REFERENCES: -
1. Forensic Accounting and Fraud
Investigation for Non-Experts by
Howard Silverstone, Michael Sheetz,
Published by John Wiley & Sons. Inc.
Hoboken, New Jersey ,2007
2. Fraud Risk Management: A Guide to
Good Practice by Helenne Doody,
Published by CIMA, 2008
3. Price Waterhouse Coopers, ―Financial
Fraud-understanding Root Causes, ―
investigation & Forensic Services
Report, 2002,1
4. Price Waterhouse Coopers, Key
elements of Anti-Fraud Programs and
controls, A white Paper 2003, 26-27
5. Association of Certified Fraud
Examiners, Fraud examiners manual,
Austin Tex, Association of Certified
Fraud Examiners, 2002
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EMERGING TRENDS IN BANKING INDUSTRY:
CHALLENGES AND PERSPECTIVES
DR. J. P. BHOSALE
Head : Research Centre in Commerce,
Arts, Commerce & Science College, Narayangaon,
Tal : Junnar, Dist : Pune, Pin : 410504, Maharashtra, India.
ABSTRACT Today, we are having a fairly well developed banking system with different classes of
banks – public sector banks, foreign banks, private sector banks – both old and new
generation, regional rural banks and cooperative banks with the Reserve Bank of India as the
fountain Head of the system.
In India the banking industry has experienced a series of significant transformations
in the last few decades. Among the most important of them is the change in the type of
organizations that dominate the landscape. Since the eighties, banks have increased the
scope and scale of their activities and several banks have become very large institutions with
a presence in multiple regions of the country.' The paper examines the new trends in sector
banking and its challenges and Perspectives. It will be useful to the academicians, banking
and insurance personnel, financial advisors, professionals, students and researchers.
Common readers will also find it informative and inculcating.
KEYWORDS: E-Banking, NPA, Networking, Global Banking, Information Technology.
INTRODUCTION:
Today banking is known as
innovative banking. The Financial sector, of
which Banking sector is the largest player,
plays a dominant role in building the
economy of an individual as well as a
nation. Banks have control over a large part
of the supply of money in circulation. They
are the main stimulus for the economic
progress of a country. A strong banking and
finance sector is, therefore, necessary for a
country to emerge as a developed one. It is
vital for growth, creation of jobs, generation
of wealth, eradication of poverty,
encouraging entrepreneurial activity and
increasing the gross domestic product.
Information technology has given rise to
new innovations in the product designing
and their delivery in the banking and finance
industries. Customer services and customer
satisfaction are their prime work. The focus
is shifting from mass banking to class
banking with the introduction of value added
and customized products.
The Banking sector has been
immensely benefited from the
implementation of superior technology
during the recent past, almost in every
nation in the world. Productivity
enhancement, innovative products, speedy
transactions seamless transfer of funds, real
time information system, and efficient risk
management are some of the advantage
derived through the technology. Information
technology has also improved the efficiency
and robustness of business processes across
banking sector. India's banking sector has
made rapid strides in reforming itself to the
new competitive business environment.
Technological infrastructure has become an
indispensable part of the reforms process in
the banking system, with the gradual
development of sophisticated instruments
and innovations in market practices.
The banking sector in India is
progressing with the increased growth in
customer base, due to the newly improved
and innovative facilities offered by banks.
The economic growth of the country is an
indicator for the growth of the banking
sector. The Indian economy is projected to
grow at a rate of 5-6 percent the country‘s
banking industry is expected to reflect this
growth
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OBJECTIVES OF THE STUDY
The main objectives of the present
research study are as under:
1. To understand the emerging technological
trends in Banking Sector in India.
2. To trace the utility of technology in
Banking.
3. To examine the challenges and
perspectives before Indian Banking Sector.
RESEARCH METHODOLOGY
This research is based on the analysis
of the secondary data and the research
proposes to throw light on the emerging
technological trends in banking sector.
The present research study uses the
most recent available published secondary
data. To achieve the above stated objectives,
the secondary data was used. The secondary
data that are mainly used are published in
annual reports of various banks and survey
reports of leading business magazines. The
secondary data was also used from various
reference books related to E-Banking, E-
Commerce, M-Commerce, Information
Technology, Finance, Commerce,
Management etc. For the said research study
the secondary data is also collected from the
various National and International Research
Journals which are related to Commerce,
Management, Banking and Finance. The
Secondary data is also collected from
various websites.
EMERGING TRENDS IN BANKING
SECTOR
The Indian banking industry is not
lagging behind, it has started providing
services electronically over the internet.
These services rendered over electronic
media include:
1. Electronic Payment Services – E-
Cheques : E-Cheques is one of the most
impact service offered by banks. Now-a-
days we are hearing about e-governance,
email, e-commerce, e-tail etc. In the same
manner, a new technology is being
developed in US for introduction of e-
cheque, which will eventually replace the
conventional paper cheque. India, as
harbinger to the introduction of e-cheque,
the Negotiable Instruments Act has already
been amended to include; Truncated cheque
and Echeque instruments.
2. Real Time Gross Settlement (RTGS) :
Real Time Gross Settlement system,
introduced in India since March 2004, is a
system through which electronics
instructions can be given by banks to
transfer funds from their account to the
account of another bank. The RTGS system
is maintained and operated account within
two hours.
3. Electronic Funds Transfer (EFT) :
Electronic funds transfer is a system of
processing and communication of payment
through electronic methods. EFT assumes
greater significance in the banking system as
the RBI also encourages the commercial
banks to adopt this technique. Inter and intra
bank transfers of funds are now made
through this EFT mechanism. Transactions
of high value i.e., at least more than one lakh
is now made through this cost effective and
quick system of settlement. Normally,
payments are made through cash, cheques,
drafts and credit cards. The latest in this
process are the debit card system, charge,
digital cash, and electronic purse and so on.
4. Electronic Clearing Service (ECS) :
Electronic Clearing Service is a retail
payment system that can be used to make
bulk payments/receipts of a similar nature
especially where each individual payment is
of a repetitive nature and of relatively
smaller amount. This facility is meant for
companies and government departments to
make/receive large volumes of payments
rather than for funds transfers by
individuals.
5. Automatic Teller Machine (ATM) :
Automatic Teller Machine is the most
popular devise in India, which enables the
customers to withdraw their money 24 hours
a day 7 days a week. It is a devise that
allows customer who has an ATM card to
perform routine banking transactions
without interacting with a human teller. In
addition to cash withdrawal, ATMs can be
used for payment of utility bills, funds
transfer between accounts, deposit of
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cheques and cash into accounts, balance
enquiry etc.
6. Electronic Data Interchange (EDI) :
Electronic Data Interchange is the electronic
exchange of business documents like
purchase order, invoices, shipping notices,
receiving advices etc. in a standard,
computer processed, universally accepted
format between trading partners. EDI can
also be used to transmit financial
information and payments in electronic
form.
7. Shared Payment Network System
(SPNS) : SPNS installed by the IBA in the
city of Mumbai, enables electronic banking
service like cash transactions, extended
hours of banking, utility payments, cheques,
point of sale facilities by the SPNS can go to
any ATM linked to S
8. Tele Banking: Tele Banking facilitates
the customer to do entire non-cash related
banking on telephone. Under this devise
Automatic Voice Recorder is used for
simpler queries and transactions. For
complicated queries and transactions,
manned phone terminals are used.
9. Phone Banking: Bank on phone provides
easy access for customers to have large
businesses through telephones. Data are
exchanged over the phone regarding any
queries, to issue instructions on balance
transfer, statement of account, cheque book,
stop payments, new schemes, interest rates
etc. at any convenient time and place. Tele
banking has gone a long way in providing
maximum customer satisfaction within the
limited infrastructure
10. Credit Cards: These plastic cards
enable customers to spend whenever he/she
wants within the prescribed limits and pay
later. Debit card is a prepaid card with
stored value, whereas credit card is post-
paid with fixed limits. It is seen that
spending is higher through debit cards than
with credit cards currently CITY Bank and
time bank have started with Debit cards and
now other banks are also following these to
launch their own cards.
11. Point of sale [POS] Terminal: Payment
card at a retail location for electronic
transfer of fund is called POS. The client
enters his personal identification number
[PIN] and confirms the amount due.
Customer‘s account is automatically debited
with the amount of purchases and it credits
the retailers account POS installed at petrol
stations and large retail houses are linked to
banks network participant sometimes make
illegal money at the cost of investors. SEBI
should find ways to overcome this to give a
good scope for D-Mat in India
12. D-Mat Accounts: D-Mat is nothing but
it is transacting shares business through
electronic media is called D-Mat. Investor
opens an account called D-Mat Accounts
with DPS. They get shares in electronic
form. Then they send the actual shares to the
investor. Investor pays for the opening,
maintenance and collection of shares. This
has reduced the paper work, bad deliveries;
loss of shares and less transaction cost.
However delays in demating, higher cost
charged by the investors has not given a
good start for the growth and scope of D-
Mat in India. Depository.
CHALLENGES BEFORE BANKING
SECTOR The maid challenges before banking
sector are as follows :
1) Customer Satisfaction:-Today,
customers are more value oriented in their
services because they have alternative
choices in it. Hence, each and every bank
has to take care about fulfillment of
customer satisfaction.
2) To Provide several personnel services:-
The present times demanded that banks are
to provide several services for which they
have to expanse in service, social banking
with financial possibilities, selective up
gradation, computerization and innovative
mechanization, better customer services,
effective managerial culture, internal
supervision and control, adequate
profitability, strong organization culture etc.
Therefore banks must be able to provide
complete personal service to the customers
who come with expectations.
3) Competition:-The nationalize banks and
commercial banks have the competition
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from foreign and new private sector banks.
Competition in banking sector brings
various challenges before the banks such as
product positioning, innovative ideas and
channels, new market trends, cross selling
etc. Banks are restricting their administrative
folio by converting manpower into machine
power i.e. banks are decreasing manual
powers and getting maximum work done
through machine power. Skilled and
specialized man power is to be utilized and
result oriented targeted staff will be
appointed.
4)Non-Performing Assets:-Non-performing
assets are another challenge to the banking
sector. Vehicle loans and unsecured loans
increases N.P.A. which terms 50% of banks
retail portfolio was also hit due to upward
movement in interest rates, restrictions on
collection practices and soaring real estate
prices. Therefore, every bank has to take
care about regular repayment of loans.
5) Managing Technology:-Developing or
acquiring the right technology, deploying it
optimally and then leveraging it to the
maximum extent is essential to achieve and
maintain high service and efficiency
standards while remaining cost effective and
delivering sustainable return to shareholders.
Early adopters‘ of technology acquire
significant competitive advances Managing
technology is therefore, a key challenge for
the Indian banking sector.
6) Government Ownership: At present, the
Government is the owner of about three-
fourths of the total assets in the banking
system. On the ownership issues, proponents
of private sector banks advocate that
Government should reduce its ownership
stake in the public sector banks as private
sector banks score over public sector banks
in profitability and efficiency. However,
broadly over the years, the performance of
public sector banks has converged with that
of new private sector banks and foreign
banks.
7) Gaps in the Flow of Credit: A high
proportion of socially and economically
underprivileged sections of society in India
is concentrated in the informal economic
activities since more than 60 per cent of
India‘s population lives in rural areas. This
sector holds importance due to growing inter
linkages between informal and formal
economic activities. Available data indicate
that the cooperatives, commercial banks,
and other formal financial sector programs
in rural areas have not displaced informal
sources of credit altogether as 43 per cent of
rural households continue to rely on
informal finance in 2002, when the last All
India Debt and Investment Survey was
undertaken.
8) Other Challenges:-
a) Customer awareness and satisfaction
b) Development of skill of bank personnel
c) Changing needs of customers
d) Coping with regulatory reforms
e) Keeping space with technology up
gradation
f) Man power planning
g) Lack of common technology standards
for mobile banking
h) Sustaining healthy bottom lines and
increasing shareholders value
i) Corporate governance
PERSPECTIVES BEFORE BANKING
SECTOR
The main opportunities that is
perspectives before banking sector is as
under :
1) Internet Banking: - It is clear that online
finance will pick up and there will be
increasing convergence in terms of product
offerings banking services, share trading,
insurance, loans, based on the data
warehousing and data mining technologies.
Anytime anywhere banking will become
common and will have to upscale, such up
scaling could include banks launching
separate internet banking services apart from
traditional banking services.
2) Offering various Channels: - Banks can
offer so many channels to access their
banking and other services such as ATM,
Local branches, Telephone/mobile banking,
video banking etc. to increase the banking
business.
3) Rural area customers: - Contributing to
70% of the total population in India is a
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largely untapped market for banking sector.
In all urban areas banking services has
entered but only few big villages have the
banks entered. So the banks must reach in
remaining all villages because majority of
Indian still live in rural areas.
4) Retail Lending: - Recently banks have
adopted customer segmentation which has
helped in customizing their product folios
well. Thus retail lending has become a focus
area particularly in respect of financing of
consumer durables, housing, automobiles
etc., Retail lending has also helped in risks
dispersal and in enhancing the earnings of
banks with better recovery rates.
5) Indian Customers: - The biggest
opportunity for the Indian banking sector
today is the Indian customer‘s. The Indian
customers now seek to fulfill his lifestyle
aspirations at a younger age with an optimal
combination of equity and debt to finance
consumption and asset creation. He
represents across societies, towns and
villages i.e. in rural areas. Consumer goods
companies are already tapping this potential
it is for the banks to make the most of the
opportunity to deliver solutions to this
market.
6) Good Customer Services: - Good
customer services are the best brand
ambassador for any bank for growing its
business. Every engagement with customer
is an opportunity to develop a customer faith
in the bank. While increasing competition
customer services has become the backbone
for judging the performance of banks.
7) Other Opportunities: - There are many
other opportunities in future in the field of
Indian banking sector e.g. to enter new
business and new markets, to develop new
ways of working, to improve efficiency, to
deliver high level of customer services.
CONCLUSION
The banks are expected to play a
very useful role in the economic
development and the emerging market will
provide ample business opportunities to
harness. Human Resources Management is
assuming to be of greater importance. As
banking in India will become more and
more knowledge supported, human capital
will emerge as the finest assets of the
banking system. Ultimately banking is
people and not just figures.
The banking sector in India is
progressing with the increased growth in
customer base, due to the newly improved
and innovative facilities offered by banks.
The banking today is re-defined and re-
engineered with the use of Information
Technology and it is sure that the future of
banking will offer more sophisticated
services to the customers with the
continuous product and process innovations.
Thus, there is a paradigm shift from the
seller's market to buyer's market in the
industry and finally it affected at the bankers
level to change their approach from
"conventional banking to convenience
banking" and "mass banking to class
banking". The shift has also increased the
degree of accessibility of a common man.
REFERENCES 1. S.B. Verma ; E- Banking and
Development of Banks, Deep & Deep
Publications, New Delhi ,2008
2. Kamlesh Bajaj & Dehjaji ; E-
Commerce,Tata McGraw hill
publications Co. Ltd., New Delhi,2005
3. Uppal, R.K. 2007. ‗Banking services and
IT‘ New century publications, New
Delhi
4. Niti Bhasin, 2007. ―Banking
development in India 1947 to2007‖,
Century publication, Delhi 110005.
5. www.indiatoday.com
6. www.wikiepedia.com
7. www.moneyindia.com
8. www.icicibank.com
9. www.rbi.org.in
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HIGHER EDUCATION: NEED OF QUALITY IMPROVEMENT
DR. S. D. TAKALKAR
Head: Department of Commerce,,
Arts, Commerce & Science College, Narayangaon,
Tal: Junnar, Dist: Pune, Pin: 410504, Maharashtra, India.
Abstract
The responsibility of institution of higher education in the context of the changing
scenario is not only confined to imparting education but also to forecast the future needs of
economy. Education is central to the human capital development and economic development
of any country. Even for India, where only 12% of the addressable population goes to college
and nearly 70% of the population is in rural areas, education is considered a very important
channel for socioeconomic mobility. Unfortunately, despite huge demand and need of
education, policy framework in India has stifled access quality and innovation in education.
Skills and knowledge are the driving forces of economic growth and social development of
every nation. Their relevance and importance has amplified with the increasing pace of
globalization and technological changes all over the world. Countries with higher and better
levels of skills adjust more effectively to the challenges and opportunities of globalization.
Many traditional Universities in India still are with their bad old recruitment, looking
State funding indifferent to self financing courses, outdated examination to self financing
courses, outdated examination system, obsolete teaching methods low standards. Time has
ripped and reaching 2005 years, that foreign Universities are entering into India soil for
competitiveness. By all manses, very shortly, new twist and turns would be seen in higher
education system. Education is an important index of human development. Among various
levels of education, higher education has a influential impact on development.
Keywords – Higher Education, Commerce Education, Higher Education Sector, Economic
Development.
INTRODUCTION
Education is an important index of
human development. Among various levels
of education, higher education has a
influential impact on development. Higher
education empowers the individual with
necessary skills and competence for
achieving important personal and social
goals. Higher education is indeed a vital tool
for intellectual and cultural developments
and a mean for achieving wider social
aspirations. Revolutions in information
technology have brought new challenges of
higher education.
The responsibility of institution of
higher education in the context of the
changing scenario is not only confined to
imparting education but also to forecast the
future needs of economy. Education is
central to the human capital development
and economic development of any country.
Even for India, where only 12% of the
addressable population goes to college and
nearly 70% of the population is in rural
areas, education is considered a very
important channel for socioeconomic
mobility. Unfortunately, despite huge
demand and need of education, policy
framework in India has stifled access quality
and innovation in education.
Skills and knowledge are the driving
forces of economic growth and social
development of every nation. Their
relevance and importance has amplified with
the increasing pace of globalization and
technological changes all over the world.
Countries with higher and better levels of
skills adjust more effectively to the
challenges and opportunities of
globalization.
As India progressively moves
towards becoming a ―knowledge-based‖
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economy, it becomes increasingly important
that it focuses on advancement of skills and
these skills have to be relevant to the
emerging economic environment. Earlier
skill development largely meant
development of shop floor or manual skills.
Even in this area there are major
deficiencies in our workforce which need to
be rectified.
CONCEPTUAL BACKGROUND
It is useful at this stage to briefly lay
out the structure of the higher education
system in India. There are several types of
higher education institutions in India, viz.
universities, deemed to be universities,
colleges, institutions of national importance,
post-graduate institutions for estimates.
Universities can be set up by an act of the
Parliament or by the State Legislature. Only
universities and deemed to be universities
and the institutions of national importance
are generally authorized to grant degrees.
Other post-graduate institutions and
polytechnics that are recognized by the All
India Council of Technical Education
(AICTE) can grant post graduate diplomas
and diplomas. Detailed information on the
structure, regulatory institutions, courses and
processes of admissions in the Indian
educational system is provided. In what
follows, we highlight a few key features of
the higher education system.
In the new knowledge economy the
skill sets can range from professional,
conceptual, managerial, operational
behavioural to interpersonal and inter-
domain skills. In the 21st century as science
progresses towards a better understanding of
the miniscule, that is, genes, particles, bits
and bytes and neurons, knowledge domains
and skill domains also multiply and become
more and more complex. We provide a brief
but comprehensive overview of linkages
between higher education and the high tech
sector and study the major linkages in India.
We find that the links outside of the labor
market are weak. This is attributed to a
regulatory structure that separates research
from the university and discourages good
faculty from joining, which erodes the
quality of the intellectual capital necessary
to generate new knowledge. In the labor
market, we find a robust link between higher
education and high-tech industry, but despite
a strong private sector supply response to
the growth of the high-tech industry, the
quality leaves much to be desired. Poor
university governance may be limiting both
labor market and non-labor market linkages.
Industry efforts to improve the quality of
graduates are promising but over reliance on
industry risks compromising workforce
flexibility. Addressing the governance
failures in higher education is necessary to
strengthen the links between higher
education and high tech industry.
OBJECTIVES OF THE STUDY
The present study was carried out
with following objectives in view.
1. To study the role of Higher Education in
the new age of globalization.
2. To study the opportunities for Higher
Education in the need for quality
improvement.
3. To suggest the strategic measures for
improvement of quality in Higher
Education.
RESEARCH METHODOLOGY
For the present research study the
data pertaining to the above objectives was
collected and reviewed the literature on the
topic concerned. The literature was thus
collected by visiting various libraries. Some
Government offices were also visited for
getting office record and statistical data. The
secondary data is also collected from various
websites.
With the above objectives keep in
mind the instructed Interview Method and
Desk Research Method was basically
adopted. The Secondary Data is collected
from various reference books related to
Higher Education, Commerce Education,
Higher Education Sector, Commerce &
Management, and Marketing & Finance etc.
For said research study secondary data is
also collected from the National and
International Research Journals which are
related to Commerce, Management,
Marketing and Higher Education.
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HYPOTHESIS OF THE STUDY
The Hypothesis of present research
study is as under :
H1 Higher education empowers the
individual with necessary skills and
competence for achieving important
personal and social goals.
H2 Recently Business, commerce education
and research are interrelated terms which
includes Finance, Marketing.
Accounting, Human Resource
Management, Entrepreneurship
Development, commercial & business
law etc.
H3 Commerce is the strongest and most
influential social institution in all
societies these days.
GATS AND HIGHER EDUCATION
GATS provides an international as
well as multilaterally accepted legal frame
work for the promotion of liberalization of
trade in services. Trade in services has been
defined under the GATS in term of four
modes of delivery viz.
Cross border supply.
Consumption abroad.
Commercial presence
Movement of natural persons
The aim GATS is to enable free
trade in services, open markets and facilitate
economic growth. As regards Higher
Education, it aims at removing restrictions
on market access and barriers to
competition.
The five sector in education covered
by GATS are primary education secondary
education, higher education, adult education
and other education Government can make
commitment for one area, several all or none
of them.
The scope of GATS was kept limited
to trade but now has entered the educational
field. Trade in educational services takes
place mainly through students (the consumer
education).
GATS and globalization has also
resulted in the beginning of the distance
revolution in higher education. GATS are
designed to increase trade liberalization
internationally and include education as a
service sector. The objective of GATS is to
liberalize trade in services as quickly as
possible.
Major changes in conditions
affecting the context of higher education
give GATS potentially critical role in higher
education around the world. These ares-
Globalization
Improvement in Information technology
and communication
Increased completion in higher
education.
OPPORTUNITIES FOR HIGHER
EDUCATION
1. Improvement in the rate of enrolment in
higher education: In India the enrolment
in higher education is just 6% of the
relevant age group as against 50%
reached by developed countries. The
economy will experience an increased
rate of enrolment due to increase in the
number of seats supplied by new
entrants in education.
2. Improved resource allocation but it
could manage to allocate only 3.5% of
GNP due to resources crunch. Entry of
private sector will enhance the future
well being of H.E. which is crucial in the
context of Governmental financial
austerity.
3. Qualitative education programmes :
many educational institutions are
excessively dependent upon Govt. grants
and hence they are forced to function in
a rigid structure taking non cognizance
of changing times and demands. With
GATS institutions may venture out of
these controls and provide new
qualitative and competitive education
programs fine-tuned to the changing
times.
4. Scope for development of faculty
performance : Many educational
institutions are non performance or
withdrawal of subsidy due to paucity of
funds such institutions may disappear
and give rise to new education systems
which will emphasize on self evaluation,
introspection and improved faculty
performance.
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5. Cost-effective education programs : One
of the modes of supply of education
under GATS is commercial presence i.e.
entry of foreign institutions in the
domestic market. This will make
transnational education more cost
effective for students who would
otherwise have gone abroad Expenses on
education abroad are saved by making it
available locally also the cumbersome
visa and immigration process can be
avoided.
6. Qualitative teaching-learning material :
The fourth mode of supply under GATS
(Distance learning, Open and Virtual
Universities will enhance the use of
modern communication technology and
provide global open access to anyone,
anywhere and anytime.
STRATEGIC DIMENSIONS FOR
QUALITY IMPROVEMENT
Economic globalization and
liberalization can be achieved if Indian
educational institutions give due attention on
enhancement of skills and up gradation of
knowledge in order to match the human
resources to the nee of the new international
scenario where employment opportunities of
quality improvement which needs the
attention of stakeholders of higher education
for the success.
1. infrastructure facilities should be
improved with updated international
standard having internet, automated
telephone, payment of fees by credit
cards, sufficient class rooms and sports
facilities etc.
2. The economy of a country depends upon
the utility of the educated man power in
the global context. The kingpins of an
institution are its teachers. They would
be expected to be more alert and
sensitive to the needs and aspiration of
the students and the society.
3. Better transparency and accountability
may cause self-appraisal and
improvement in faculty performance.
4. Appointment of super specialized
teachers in educational institutions with
reasonable remuneration should be
followed.
5. Training the teachers and by conduction
orientation courses with a view to adapt
to new changes as the market demands.
6. There should be continuous assessment
and counselling. Special attention should
be paid on counselling to guide the face
the challenges in their life.
7. Teachers should frame the curriculum
with new knowledge with the help of
interdisciplinary interactions. It should
be based on societal needs and market
demands.
8. Due emphasis to the learning process
than teaching process through students
participation is needed.
9. Creation capacity for research and
enquiry in colleges should have the
highest priority. Research oriented
curriculum should be improved. Project
works would be feasible method of
initiating the students thinking and
introducing them to reality.
10. Application oriented research must be
encouraged Institutions should
encourage the teachers to undertake
research projects and consultancy
services.
11. Making consultation with industries for
services must be followed. Visits to
centers of excellence with better
infrastructure and professional talks.\
12. Creating capacity for entrepreneurial and
innovative skill must be one of the
objectives of education. Many
entrepreneurship courses should be
started in the educational institutions.
13. Working library and active network
facilities should be improved in the
institutions.
14. Developing a harmonious and integrated
personality would just not be possible if
system does not inculcate values of
culture, heritage and traditions. Indian
heritage, culture and values need to be
thoroughly studied, analyzed and
incorporated comprehensively in the
educational system right from the initial
stage to higher dimensions of education.
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15. Yogic meditation has stood the test of
science and medical experiments. It will
provide an insight for character
development and spiritual direction.
CONCLUSION
Liberation has opened the gates of
education market for meeting
competitiveness, challenges and change. In
the wind of globalization, the student is
searching for quality education to enter into
global job market, whereas Institutions,
teacher, administrative is not yet geared up
to plug off the gap. Many traditional
Universities in India still are with their bad
old recruitment, looking State funding
indifferent to self financing courses,
outdated examination to self financing
courses, outdated examination system,
obsolete teaching methods low standards.
Time has ripped and reaching 2005 years,
that foreign Universities are entering into
India soil for competitiveness. By all
manses, very shortly, new twist and turns
would be seen in higher education system.
Education is an important index of human
development. Among various levels of
education, higher education has a influential
impact on development. Higher education
empowers the individual with necessary
skills and competence for achieving
important personal and social goals. Higher
education is indeed a vital tool for
intellectual and cultural developments and a
mean for achieving wider social aspirations.
Revolution in information technology has
brought new challenges of higher education.
REFERENCES
1. H. Ashok Chandra Prasad and S. George
(ed) EXIM Dynamics Services and
WTO-An Indian Perspective, Common
Wealth Publishers, New Delhi, 1996.
2. Chauhan, C.P.S, Hr. Education in India :
Challenges of Global Trends, University
News, 40(17) April 209-May 05 2002.
3. Prof Sunil Kumar Gupta. a lecture
delivered by the Professor al I he Silver
Jubilee Celebration held at Senate Hall,
ML1 Canchipur on May 10. 2010.
4. Elizabeth Goldsmith and Sue L.T.
McGregor(2QQO); E-commerce:
consumer protection issues and
implications for research and education;
J Consumer Studies & Home
Economics; Vol.24, No.2, June 2000,
pp. 124-127.
5. R.C.T.Cheung, New Challenges in
Commerce Education, Department of
Computing, Hong Kong Polytechnic
University.
6. Dr. Kishor Moharir, Higher Education In
Commerce-Challenges And
Opportunities, Sardar Patel College,
Chandrapur, Volume No.1, Issue No.9
Issn 2277-1166.
7. Munesh Kumar, Hr. Education in India
and Emerging Trends, University News,
42(15) April, 12-18, 2004.
8. A. Ranga Reddy, Higher Needs Speedy
Reforms, University News, 42(17)
April-26 May-02, 2004.
9. Bharat E. Sant, Private Participation in
Indian Higher Education Towards
Excellence in Teaching & Learning,
University News 42(07) Feb. 16-22,
2004.
10. Chalam K.S. (2003) Introduction to
Educational Planning & Management,
Amol Publishers, New Delhi.
11. www.lsn.curtin.edu.au
12. www.epw.org.in
13. www.ingentaconnect.com
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ENTREPRENEURSHIP DEVELOPMENT: A CRITICAL ANALYSIS
PROF. SANTOSH RAM PAGARE
Head, Dept. of Commerce,
K. J. Somaiya College, Kopargaon, Maharashtra.
Abstract
The problem of unemployment has become a major concern to the government. The
pool of unemployed youths is continousily increasing day in day out. The pool consists youths
of different levels of education: form four leavers, diploma holders and even university
graduates. The empowerment of the youths with the self sustaining skills can be of great
importance to the government in its efforts to contain youth unemployment. Besides, when
people are working it helps to reduce the evils of idleness such crimes and drug abuse. This
stems from the fact that majority of the people especially the youths are in the rural areas.
The training of the entrepreneurial skills and competencies to the youths can tame the
rampant movement of the youths to the urban centers to seek for employment. This is a form
of human resource development which come seems to be neglected or not to have received
full attention from the different stakeholders. Therefore, efforts to enhance this important
source of human resource development should be supported so as to realize the full benefits.
This study was motivated by the need to know whether entrepreneurial training on the
youths has been done and determine factors which influence entrepreneurial flair among the
micro businesses. The study used descriptive research design and the population of interest
was the district officers in the ministry of youth affairs. The survey was done using
questionnaires distributed using drop and pick method.
The findings of this research reflected how advancement in entrepreneurship can be
used to curb the problem of unemployment. Moreover, Technological change, scanty market
information, Lack of managerial training and experience, inadequate education and skills,
Lack of credit, Poor national policy and regulatory environment were found to be major
problems facing youth entrepreneurship. The training of entrepreneurial skills to the youths
has been done by various districts. The findings indicate that training the youths on
entrepreneurial skills is paramount and an important step reducing unemployment and
enhancing the lives of the youths as they become self reliant. This has the overall effect of
improving the economic welfare of the people at large.
Keywords: Entrepreneurship; human resource; development
Introduction
Entrepreneurship and development
go together. Learning to think like an
entrepreneur, whether its ones own
business or work for an organization, is a
critical skill successful business. When
one think like an entrepreneur/owner, then
everyone benefits. Employee or
entrepreneur benefits from taking charge
of business career development. Thinking
like an entrepreneur forces one to look for
niches and opportunities previously
overlooked. By far the greatest benefit is
that it forces one to be self-driven and that
can only be good for business career.
Entrepreneurs need to have a mix of skills
at hand: knowledge of marketing,
leadership, basic finance, operations, talent
management, business management,
technology and other skills. They need to
have these skills since initially their
companies usually consist of 1 or 2
employees and they do not have the luxury
of having specialists. Learning enough of
these skills will give them an advantage.
However, entrepreneurs do not need to be
experts in all of these areas. They just need
to have a basic knowledge and be able to
see an opportunity from all angles so that
they can have an overall picture. That is
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why entrepreneurship and development go
together. An entrepreneur‘s mindset is a
great advantage in business. An employer
also benefits from having an employee
who is fully invested in the business.
Youth unemployment also has a social
cost in terms of indirect health costs, illicit
activities which lead to increased
insecurity especially in urban areas. This
has led to the introduction of
entrepreneurship education and training to
develop entrepreneurial skills among
graduates from vocational and technical
training institutions, and even among
university graduates.
Development of entrepreneurship
education and training
The government should also ensure
that important sectors of the economy such
as agricultural and industrial sectors are
well managed to support the self employed
in the informal sector to promote
entrepreneurial spirit. The increased trend
of using vocational and technical training
institutions for entrepreneurial skills
development is due to strong government
belief that entrepreneurship can indeed be
taught. This calls for a systematic build up
of knowledge to make entrepreneurship a
rich and valid curriculum.
Statement of the problem
Most of the developing countries
are facing the problem of unemployment.
This affects mostly the youths especially
university graduates who lack employment
after graduating ,they remain
unemployment and fail to contribute
positively towards economic development
of the economy .This represents a pool of
unutilized human resources. The
despondence of the matter makes the
youths to be easily lured into unorthodox
ways of earning their livelihood. On the
other hand the government has tried to
tame this economic evil. Government has
for example showed their committal into
the matter by promising to create 500, 000
new jobs for each year. The statistical facts
however, have demonstrated how far the
battle on the issue is from being won. This
move supported by international bodies,
national associations and other
stakeholders of the small enterprises may
yield promising results of reduced levels
of unemployment and thus alleviating
poverty considerably. The recent move by
the government to introduce the
entrepreneurship development fund is a
milestone in luring the youths to engage in
self employment. This however calls for
support from each and every stakeholder.
Since, the move is a long term strategy,
new measures should be put in place so as
to enhance the success of the initiative. In
addition, the government should be on the
forefront in developing ways of nurturing
the entrepreneurial culture. Different
approaches may be pursued to achieve this
very instrumental tool of economic
development. Usually, majority of the
people enter into business or other forms
of self employment after their anticipated
formal employment chances are doomed.
Research has shown that most of the
successful entrepreneurs got some training
before joining or undergo training as they
progress with their business. This is
because every business has its own tenets
of working different from that of the other
business its important that one becomes
acquainted with them for efficiency in
operation. Therefore, those who receive no
training mostly lack these facets. Further,
the business environment is very dynamic
and requires constant changes of the
approaches used in doing businesses. This
explains the ideology of having success
rate of new business being only 15% in the
first 5 years.
Management of Entrepreneurship
Development
Perhaps the government should
consider spreading out the benefits of
entrepreneurship development fund
throughout the country. This can be done
through engaging personnel to run
business development centers where
training can be disseminated and business
development services provided. This
means that part of the funds should
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inevitably be used in promoting
entrepreneurship and business training if
the funding is going to achieve the desired
objectives.
A National board of trustees should be
charged with management of the fund
whereas applications should be handled at
the business development centers. The
experiences of the Ministry of Agriculture
with its agricultural extension officers and
probably that of Agricultural Development
Corporation should form a good guide on
the way forward, regarding adoption of the
business development centers. The centers
will not only enhance continued
monitoring and provision of assistance to
new entrepreneurs but also facilitate
disbursements of the funds across the
board. This approach has worked
successfully in Eastern European
Countries, which were
formally under communism but chose to
develop their countries through small and
medium enterprises (SMEs) after the
collapse of communism.
Challenges facing youth
entrepreneurship
1. Lack of Managerial Training and
Experience - Many youth
entrepreneurs lack managerial training
and experience. They develop their
own approach to management, through
a process of trial and error. As a result,
their management style is likely to be
more intuitive than analytical, more
concerned with day-to-day operations
than long-term issues, and more
opportunistic than strategic in its
concept (Hill, 1987). Although this
attitude is the key strength at the start-
up stage of the enterprise because it
provides the creativity needed, it may
present problems when complex
decisions have to be made. A
consequence of poor managerial ability
is that young entrepreneurs are ill
prepared to face changes in the
business environment and to plan
appropriate changes in technology.
Majority of the youths who run small
businesses are ordinary lot whose
educational background is lacking.
Hence they may not be well equipped
to carry out managerial routines for
their enterprises (King and McGrath,
2002).
2. Inadequate Education and Skills -
Education and skills are needed to run
even small businesses. Research shows
that majority of the lot carrying out
their businesses are not quite well
equipped in terms of education and
skills. Study suggests that those with
more education and training are more
likely to be successful in their
businesses (King and McGrath, 2002).
As such, for small businesses to do
well, people need to be well informed
in terms of skills and management.
Small businesses in ICT appear to be
doing well with the sprouting of many
commercial colleges offering various
computer applications. Further, studies
show that most of those running small
and medium businesses in this sector
have at least attained college level
education (Wanjohi and Mugure,
2008).
3. Lack of Credit - In developing
countries, young entrepreneurs have
great difficulty in obtaining the
necessary financial resources to
effectively scale up and grow their
businesses (Roberto, 2008). Lack of
access to credit is almost universally
indicated as a key problem for young
entrepreneurs. This affects technology
choice by limiting the number of
alternatives that can be considered.
Many young entrepreneurs may use an
inappropriate technology because it is
the only one they can afford. In some
cases, even where credit is available,
the entrepreneur may lack freedom of
choice because the lending conditions
may force the purchase of heavy,
immovable equipment that can serve as
collateral for the loan. Credit
constraints operate in variety of ways
where undeveloped capital market
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forces entrepreneurs to rely on self-
financing or borrowing from friends or
relatives. Lack of access to long-term
credit for young entrepreneurs forces
them to rely on high cost short term
finance. There are various other
financial challenges that face young
entrepreneurs. They include the high
cost of credit, high bank charges and
fees.
4. National Policy and Regulatory
Environment - The national policy
and regulatory environment has an
important impact on technology
decisions at the enterprise level. The
structural adjustment programs (SAPs)
implemented in many countries are
aimed at removing heavy policy
distortions, which have been viewed as
detrimental to the growth of the private
sector. SAPs tend to severely affect
vulnerable groups in the short run and
have been associated with the
worsening living conditions in many
countries (USAID, 1991). The findings
in a study by Wanjohi and Mugure
(2008) indicate that business
environment is among the key factor
that affects the growth of small
enterprises. Unpredictable government
policies coupled with ‗grand
corruption,‘ high taxation rates, all
continue to pose great threat, not only
to the sustainability of small businesses
but also to the economy that was
gaining momentum after decades of
wastage. In theory, structural
adjustment and trade liberalizations
were supposed to bring benefits to
micro and small enterprises. However,
there is evidence across the world of
both negative and positive impacts of
these policies on small and medium
businesses development. It can perhaps
be said as a generalization that those
with better skills and knowledge, and
located in strong market niches, have
benefited. On the other hand, those
faced with low barriers to entry have
seen a saturation of markets and
growing poverty. The legal and
economic framework in which
enterprises operate is crucial to their
performance. In the literature on
enterprise development, it has been
argued very forcefully that the legal
framework of many countries serves as
a barrier against enterprise.
5. Technological Change - Change of
technology has posed a great challenge
to small businesses. Since the mid-
1990s there has been a growing
concern about the impact of
technological change on the work of
micro and small enterprises which are
majorly owned by young
entrepreneurs. Even with change in
technology, many small business
entrepreneurs appear to be unfamiliar
with new technologies. Those who
seem to be well positioned, they are
most often unaware of this technology
and if they know, it is not either locally
available or not affordable or not
situated to local conditions. Foreign
firms still remain in the forefront in
accessing the new technologies.
6. Human resource development -
Human resource development has been
defined by as a continuing, dynamic
and empowering process. The growth
of a human being pertains a myriad of
factors. These factors affect the
cognitive abilities, spiritual and
physical aspects of people. Form the
above broad definition, it can be seen
that the strengths and weaknesses of
people and their abilities can be
identified. Today, a well defined
system of organization in the world of
industry and business has to be
established. Law of performance which
forms the key of production objects is
one of the major items the top
management of firms has realized. The
product of the available abilities and
motivation yields high performance
and labor force is the life sustaining
organ of production. The desire for
long life of the firms has made the top
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managers to devise some holistic
programs which seek to develop
emotions, spirits, body and mind.
These programs therefore will go
beyond the technical assistant to more
professional and comprehensive
development of the labor force For a
business to operate, some resources are
indispensible like the finances, but the
development of labor force is
important too. This is because the
workforce is what translates raw
materials into finished goods
(production). HR deals with the
personnel and is very important
component of production for many
industries as it is very flexible. The
workers could be inventors. Hence,
they can manipulate the environment
in which they operate. They can invent
new thingsor ideas on what to do and
how to do it unlike the other resources
like the computers and the machines
which rely on a predetermined or set
systems. The personnel can preplan or
preset some tasks and also bring in
more innovations to the existing
systems of operation. They are more
idiosyncratic and highly sensitive.
They, have certain rights, notions and
dignity which should be respected.
They have aspiration to live in better
and satisfied lives. Their management
is dynamical and changing. They can
do some things which are
unpredictable.
References
1. Burgess, S. (2001) (Eds),Managing
Information Technology in Small
Businesses: Challenges and Solutions,
Idea Group Publisher, Hershey, PA, .
2. Corbitt, B.J. (2000), "Developing
intraoganizational electronic
commerce strategy: an ethnographic
study", Journal of Information
Technology, Vol. 15 pp.119-30.
3. Cragg, P.B., King, M. (1993), "Small-
firm computing: motivators and
inhibitors", MIS Quarterly, Vol. 17
No.2, pp.47-59.
4. Hill, T. (1987). Small business
production/operations management.
Macmillan Education Ltd.
5. King, K. and McGrath, S. (2002).
Globalization, Enterprise and
Knowledge. Symposium, Oxford.
6. Kinyanjui, M. (2000). Tapping
opportunities in enterprise clusters in
Kenya: the case of enterprises in
Ziwani and Kigandaini. Working Paper
525, Institute for Development Studies,
University of Nairobi, Nairobi Kenya.
7. Lange, T., Ottens, M., Taylor, A.
(2000), "SMEs and barriers to skills
development: a Scottish perspective",
Journal of European Industrial
Training, Vol. 24 No.1, pp.5-11.
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ROLE OF MOBILE BANKING IN THE PRESENT ERA
DR. MUNDE SANJEEVANI DASHRATHRAO
Asst.Prof.in Commerce, Department of Commerce,
KSGM College Dharmapuri, Taq-Parali(V), Dist-Beed, Maharashtra.
Abstract
Mobile banking is a revolution that is driven by the world‟s one of the fastest growing
sectors – mobile communication technology. This study explores the issues in mobile
banking. With electronic banking, users can now conveniently carry out banking
transactions, but this convenience cannot be achieved if the user does not have access to the
internet, hence, in other words, the user cannot carry out a banking transaction while waiting
for a bus, or perhaps while having lunch in a restaurant. With m-banking, convenience can
be achieved 24hrs a day. This is because a user has access to his mobile phone all day, at all
times. So, to effectively achieve a truly convenient banking mode, a truly mobile mode of
banking has to be explored, hence the need for m-banking. In the broader sense mobile
banking is that type of execution of financial services in the course of which - within an
electronic procedure - the customer uses mobile communication techniques in conjunction
with mobile devices. Mobile Banking can be said to consist of three inter-related concepts
viz. Mobile Accounting, Mobile Brokerage and Mobile Financial Information. Mobile
Banking is an emerging alternate channel for providing banking services. India is the second
largest telecom market in the world, which is having high potential for expanding banking
services using mobile. In recent times, the Banking Sector has been making rapid straights by
using information technology as a platform. An attempt has been made in this paper to
examine various innovative instruments that have been introduced by Banks in recent times
among that mobile banking is one instrument and also explains about what are the recent
trends in mobile banking.
INTRODUCTION
The terms Mobile Phone banking and
mobile banking (MBanking) are used
interchangeably. The term M-Banking is
used to denote the access to banking services
and facilities offered by financial institutions
such as account-based savings, payment
transactions and other products by use of an
electronic mobile device. Mobile banking
has yielded a multiple effect on the number
of solutions available to clients. This is in
addition to more efficient transactional
environment and the high substitution of
banking points. In the broader sense mobile
banking is that type of execution of financial
services in the course of which - within an
electronic procedure – the customer uses
mobile communication techniques in
conjunction with mobile devices. Mobile
Banking can be said to consist of three inter-
related concepts viz. Mobile Accounting,
Mobile Brokerage and Mobile Financial
Information. Mobile Accounting is
sometimes characterized as transaction-
based banking services that revolve around a
bank account and are availed using mobile
devices. Not all Mobile Accounting services
are however necessarily transaction- based.
Whereas Mobile Brokerage, in context of
banking services, refers to intermediary
services related to the bourse, e.g. selling
and purchasing of stocks.
TRENDS IN MOBILE BANKING
1. The advent of the Internet has
revolutionized the way the financial services
industry conducts business, empowering
organizations with new business models and
new ways to offer 24 hour accessibility to
their customers.
2. The ability to offer financial transactions
online has also created new players in the
financial services industry, such as online
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banks, online brokers and wealth managers
who offer personalized services, although
such players still account for a tiny
percentage of the industry.
3. Over the last few years, the mobile and
wireless market has been one of the fastest
growing markets in the world and it is still
growing at a rapid pace. According to the
GSM Association and Ovum, the number of
mobile subscribers exceeded 2 billion in
September 2005, and now exceeds 2.5
billion (of which more than 2 billion are
GSM).
4. Mobile devices, especially smart phones,
are the most promising way to reach the
masses and to create ―stickiness‖ among
current customers, due to their ability to
provide services anytime, anywhere, high
rate of penetration and potential to grow.
According to Gartner, shipment of smart
phones is growing fast, and should top
20million units (of over 800 million sold) in
2006 alone.
5. As the trend is shifting to mobile banking,
there is a challenge for CIOs and CTOs of
these banks to decide on how to leverage
their investment in internet banking and
offer mobile banking, in the shortest possible
time.
6. The proliferation of the 3G (third
generation of wireless) and widespread
implementation expected for 2007– 2013
will generate the development of more
sophisticated services such as multimedia
and links to m-commerce services.
MOBILE BANKING IN INDIA
In India, traditional branch-based
banking remains the most widely adopted
method of conducting banking transaction, at
the same time commercial banks are
undergoing a rapid change majorly driven by
the information & telecommunication (ITC)
technology. ICICI bank pioneered in mobile
banking services in India. Among public
banks, Union Bank of India was first to
introduce mobile banking (2010). Today
many commercial banks have launched
mobile banking using ITC technology and
now they can reach out to customers and
provide them with not only general
information about its services but also the
opportunity of performing interactive retail
banking transactions anytime, anywhere.
Some banks in India have started providing
the mobile banking service to their
customers that include State Bank of India
(SBI), Union Bank of India (UBI), Punjab
National Bank (PNB), HDFC, ICICI, Axis
Bank, etc.
MOBILE BANKING IN THE WORLD
Mobile banking is used in many parts
of the world with an exception of remote and
rural areas with little or no infrastructure.
This aspect is also popular in countries
where most of their population is unbanked.
In most of these places, banks can only be
found in big cities, and customers have to
journey hundreds of miles to the nearest
bank. Hence, Numbers of cities have
introduced such kind of services. In Iran,
banks such as Parsian, Tejarat, Mellat,
Saderat, Sepah, Edbi and Bankmelli offer the
service. Banco Industrial provides the
service in Guatemala. Citizens of Mexico
can access mobile banking with Omnilife,
Bancomer and MPower Venture. Kenya‘s
Safaricom has the M-Pesa Service, which is
mainly used to transfer limited amounts of
money, but increasingly used to pay utility
bills as well. In 2009, Zain launched their
own mobile money transfer business, known
as ZAP, in Kenya and other African
countries. In Somalia, the many telecom
companies provide mobile banking, the most
prominent being Hormuud Telecom and its
ZAAD service. Telenor Pakistan has also
launched a mobile banking solution, in
coordination with Taameer Bank, under the
label Easy Paisa, which was begun in Q4
2009.
MAJOR SERVICES IN MOBILE
BANKING
Account information
1. Alerts on account activity or passing of set
thresholds
2. Monitoring of term deposits
3. Access to loan statements
4. Access to card statements
5. Mutual funds / equity statements
6. Insurance policy management
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Payments, Deposits, Withdrawals and
Transfers.
1. Cash-in, cash-out transactions on an ATM
2. Domestic and international fund transfers
3. Micro-payment handling
4. Mobile & Direct to Home package
recharging
5. Purchasing tickets for travel and
entertainment
6. Commercial payment processing
7. Bill payment processing
8. Peer to Peer payments (e.g., Pop money,
Isis)
9. Withdrawal at banking agent
10. Deposit at banking agent
ISSUES AND CHALLENGES IN
MOBILE BANKING
The rapid technology development in
Mobile technology like 2G, 3G, 4G has
become major challenges for banks. It is
visible that the bank which started Mobile
Banking in the form of SMS banking, then
adopted application (software) of Smart
phones, mobile operating system and Mobile
Apps posed the banks to adopt the current
technology. The customers are mostly using
ATM and online banking services. Most of
the customers feel comfortable without
mobile banking. They also feel, there are
chances of misuse in mobile banking due to
mobile handset theft.
MOBILE BANKING FUTURE
FUNCTIONALITIES
Based on the ‗International Review
of Business Research Papers‘ from World
business Institute, Australia, following are
the key functional trends possible in world
of Mobile Banking. With the advent of
technology and increasing use of smartphone
and tablet based devices, the use of Mobile
Banking functionality would enable
customer connect across entire customer life
cycle much comprehensively than before.
With this scenario, current mobile banking
objectives of say building relationships,
reducing cost, achieving new revenue stream
will transform to enable new objectives
targeting higher level goals such as building
brand of the banking organization.
CONCLUSIONS
1. Though M- banking seems to cut across
all groups, usage is more pronounced
among youngsters.
2. With the help of mobile banking users
can send money using their phone to any
other customer in the country, deposits
and withdrawals in less time.
3. According to the country Mobile
banking provides financial services,
including solutions facilitating savings
and insurance.
4. Mobile Banking facilitates payments,
giving users a way to pay their bills and
to pay for goods at shops that accept
Orange Money electronically without
cash.
5. Mobile Banking, as has been
demonstrated, has gained non-negligible
relevance for banks today. Developments
in the banking sector, e.g. increased
competition on account of technological
developments coupled with the process
of globalization have produced new
challenges for banks. Its main
contribution, however, can be expected
to take place in the strategic field as it is
all set to become an instrument of
differentiation.
6. Mobile Banking seems to possess the
potential to become one of the widely
spread and accepted application in the
field of Mobile Commerce, particularly
in the backdrop of its high acceptance
across commercially important sections
of the society. We may expect to see
Mobile Banking go into the footsteps of
Online Banking, i.e. to become a
standard service offered by every bank
worth its name. Hence, the future for
banking sector is going to make rapid
straights in near future.
7. One of the draw back in Mobile Banking
is most of the customers feel comfortable
without mobile banking. They also feel,
there are chances of misuse in mobile
banking due to mobile handset theft.
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Nations Foundation. |
5. Townsend, A. M. (2000). Life in the
real-time city: Mobile telephones and
urban metabolism. | 7. Journal of Urban
Technology, 7(2), 85-104. | 8. Sharma,
Prerna, Bamoriya & Preeti Singh (2011)
- Issues & Challenges in Mobile Banking
In India: A Customer‗s Perspective. |
6. www.bankrate.com/finance/banking/find
ing-best-mobile-banking.aspx.
7. http://www.thejakartapost.com/news/201
2/05/11/commonwealth-bank-tapping-
growing-mobile-banking-market.html. |
8. http://www.newfreeppt.com/banking/mo
bile-banking-ppt-freedownload
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ELECTRONIC ACCOUNTING SYSTEM
PRIN. D. B. SHINDE
Karmaveer Shantarambapu
Kondaji Wavare, Arts, Science
& Commerce College, Cidco, Nashik
SAVITA KULKARNI-MAIRALPANT
Assistant Professor
Jugul Dist-Belgauam,
Karnataka
Introduction
E-accounting is the application of
online and Internet technologies to the
business accounting function. Similar to e-
mail being an electronic version of
traditional mail, e-accounting is "electronic
enablement" of accounting and accounting
processes which are more traditionally
manual and paper-based. E-accounting
involves performing regular accounting
functions, accounting research and the
accounting training and education through
various computer based /internet based
accounting tools such as: digital tool kits,
various internet resources, international web-
based materials, institute and company
databases which are internet based, web
links, internet based accounting software and
electronic financial spreadsheet tools to
provide efficient decision making.
E-Accounting is new development in
field of accounting. It means all your
transactions will record in online server or
data base. E-accounting involves performing
regular accounting functions, accounting
research and the accounting training and
education through various computer based
internet based accounting tools such as:
digital tool kits, various internet resources.
international web-based materials, institute
and company databases which are internet
based, web links, internet based accounting
software and electronic financial spreadsheet
tools to provide efficient decision making.
An E-accounting system could be thought of
as an inter-organizational system because of
its capability to electronically integrate a set
of firms.
Accounting plays a critical role in the
success or failure of contemporary business
institutions. Accounting systems are
responsible for recording, analyzing,
monitoring and evaluating the financial
condition of companies, preparation of
documents necessary for tax purposes,
providing information support to many other
organizational functions, and so on. Prior to
the advent of personal computers, businesses
were limited to manual methods for keeping
track of financial data.
In many operational applications the
accounting entries can be generated as a by-
product of the underlying transactions. A
computerized accounting system is able to
handle financial data efficiently, but the true
value of an accounting system was that it
was able to generate immediate reports
regarding the company.
Conceptual Background
Electronic accounting can be defined
as " to follow internal and external
operational events as well as to document,
record, archive, summarize those events, and
to present summary information to the
vested interest groups in an electronic
environment". It is possible to analyse the
electronic accounting concept in three
categories, such as e-taxing, e-banking, and
pre accounting practices. In e-taxing
practice, transactions such as preparation of
tax returns, imputation of taxes, and
following tax-related debt and other relevant
information occur in an electronic
environment. E-banking practices consist of
enterprises' bank-related transactions that
actually take place in an electronic
environment via internet. E-pre accounting
practices are composed of actions such as
following the transactions conducted
between firms and customers or sellers,
keeping and registering documents, and
preparing financial tables in an electronic
environment and submitting those to related
persons via internet
The concept of quality here refers to
a group of qualities that make it consistent,
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and to conform to the specified
specifications, standards and designs. The
purpose of the government e-accounting
information systems is to take part in
improving and strengthening the business in
business organizations, and the quality of
government accounting information systems
influenced by the needs of users of
government accounting information. The
characteristics of government accounting
information are a set of qualitative
characteristics that make government
information useful to information users.
In short E-accounting is these of
internet technologies to. the organizational
accounting purposes: .In this process,
accounting records exist In digital form
Instead of on paper.
It is an accounting information
system, where source records, transaction
and accounting entries are received,
transferred, reported and filed within or
outside the organization electronically.
Objectives of the Research Study
The main objectives of present research
study are as follows-
1. To study the conceptual background of
the term E-Accounting.
2. To study & examine the benefits &
disadvantages of E-Accounting.
Research Methodology
The said research study is based on
secondary data. Such secondary data is
collected from various reference books
related to E-Accounting, Financial
Accounting, Corporate Accounting, E-
Auditing, Trade, Commerce, Industry,
Economics, Management.
The secondary data is also collected
from various websites and other related
literature and reviewed it. For the said
research study secondary data is also
collected and reviewed from the various
National and International Research Journals
which are related to E-Accounting & E-
Auditing.
Need of E-Accounting
Normally, every businessman wants
to access or control its financial data or
accounts from anywhere, any time in a
secure environment. If a person is outside
the country or far from his office and his
financial data is in the office or at the
desktop of his computer, than how does he
access the required information? If you
takeout your laptop with yourself than it will
hinder your accountant job. If you take a
copy of your account in any portable device,
it will have to be updated time to time which
is again wastage of time and it may lose or
may become part of another problem. So,
only solution is e- accounting. E-accounting
maintains your financial data in a safe
environment. In this process, you have a
password to access your account and only
those persons who have password can access
the accounts. It means only authorized
persons can access. E-accounting has visited
in India with a rainbow of opportunities.
1. The accounting function receives
attention only when a critical need arises.
No time wastage.
2. Up to date information which is available
in real-time.
3. No need of Hiring/Training accounting
and payroll staffs.
4. No Payroll related costs, FICA, workers
compensation, unemployment,
vacation/sick benefits, health insurance
benefits, and many other expenses.
5. No need to upgrade software and annual
updates from client side.
6. Check and monitor office supplies
(check stock, paper stock, envelopes,
toner)
7. No additional bank charges
8. Cost saving on office space (rent for
additional offices)
Benefits of E-Accounting
Following are the .benefits associated
with the use of E-accounting.
1. No need of in-house bookkeepers'
training and expertise
2. No problems with employee turnover,
vacations, sick leave and absenteeism
3. No communication difficulties between
the accountant and business owner or
organization due to load / work pressure.
4. The business organization concentrates
on the revenue side of business, and
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spends as little time as necessary on the
accounting and payroll function.
5. Save time and money.
6. Gain greater control of finances by
moving from paper records to
computerized accounting software.
7. Transactions that affect your bank
account can be sent automatically to the
online accounting application.
8. Send sales invoices and other documents
directly to another business's accounts
for the recipient to approve without
having to reenter the information.
9. E-accounting may improve the
effectiveness of accounting and reporting
tasks, budgeting, controlling and auditing
which may reflect on the organization's
effectiveness as well.
10. Almost all purchases and incomes are
already tracked by your bank accounts
and credit cards. So, instead of re-typing
everything into your desktop accounting
software or spreadsheet you can import
the transactions securely and
automatically.
11. Organization's entire accounting project
can be easily outsourced. Bye-
accounting system.
12. It generates employment opportunities
for software developer and accountants.
13. It reduces cost of accounting or causes
cost saving (related to payroll etc). No
installation cost, no software update
required, and no book keepers required.
14. Most of the websites provide this service
free of cost for example e.g.
www.wavwaccounting.com If
accountant has gone outside the area than
he can deal in accounts from that place
also (e accounting is free from location
and can be accessed from anywhere in
the wor1d at any time).
15. E-accounting helps business to keep their
financial data in safe secure environment
(In case if user computer crashes then
their documents are still safe on the
remote server.
16. Allows multiuser access, hence it saves
time.
17. No need of in-house book keepers.
18. Large storage capacity.
Disadvantages of E-Accounting
1. Data security problem.
2. Speed of broadband connection.
3. Network connectivity problem (internet
dependency).
4. Required ability to use.
5. Fear of losing your customer data base.
6. If you provide information to a machine
or over the internet you can never be sure
it really gets to the right place.
7. Data security - All your data resides on a
remote server: however, a back up can be
taken regularly.
8. Speed - Most of the currently available
online office suites require a high
broadband Internet connection.
9. Lack some features available on the
offline office suites: but this is
progressively becoming available (MS
LIVE, Google online-Suite, Think free,
Zoho Office, Internet Office.Biz and
eDeskOnline)
10. A network connection (usually Internet
access) is required to send and receive
changes. That is, internet dependence
makes it more difficult to work offline.
Conclusion
Due to technological progress, both
the preparation of a document and
arrangement of accounting records have
been carried out in electronic
environment. The fast developments
experienced in information technologies
have impact on all professions as well as the
people carrying out accounting profession.
By means of these developments, benefiting
from the information generated by the
accounting system that has come to a level
that generate extremely various information
in a short-time completely by the
information users and approval of the
reliability of that information by unrelated
third persons are very important. In other
words, electronic accounting practices have
provided saving of time, synchronous, and
comparable presentation of financial
statements become easier. On the other hand,
the electronic audit concept has been brought
forward by carrying out the audit activities
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through electronic environment by means of
electronic entries and documents. The study
provides strong evidence that the use of E-
Accounting has contributed to the
effectiveness of tasks as expected. The study
shows that the use of E-Accounting may
improve the effectiveness of accounting and
reporting tasks, budgeting, controlling and
auditing which may reflect on the
organizational effectiveness as well. An
improved quality in the system may provide
better support for the tasks performed by the
system. This study finds that the most
significant impacts of E-Accounting are on
accounting and reporting and budgeting task
performance respectively.
References
1. Dr. Sanjay Kumar and Preeti Jain, What
and Why E-Accounting?, The Economic
Challenger, No-14, Issue-55, April-June-
2012.
2. Suleman, YUKCU and Seckin GONEN,
Fraud Auditing in Electronic Accounting
Practices, African Journal of Business
Management, Vol-6(4), pp.1222-1233,
Feb. 2012.
3. Mohammed Amidu, John Effah and
Joshun Abor, E-Accounting Practices
among Small and Medium Entreprises in
Ghana, Journal of Management Policy
and Practice, Vol-12(4) 2011.
4. Shraddha Verma, E-Accounting:
Problems & Prospects, Financ and
Investment E-Accounting Problems &
Prospects.
5. Hall J. (2007). Accounting Information
systems. Ouebec, Canada: Thomson
Higher Education.
6. Marriott, N. and Marriott, P (2000),
Professional Accountants and the
Development of a Management
Accounting Service for the Small Firm:
Barriers and Possibilities, Management
Accounting Research,11(4).
7. Mitchell, F, Reid, G., and Smith, J.
(1998), A Case for Researching
Management Accounting in SME's,
Management Accounting: Magazine for
Chartered Management Accountants,
76,30-33.
8. Akdogan N (1998). Cost Accounting
Practices in Unified Accounting System.
Istanbul, Turkey.
9. Shim JK, Siegel JG (2005). The Vest
Pocket Guide to Information
Technology, New Jersey: John Wiley
and Sons Inc.
10. Singleton T, Singleton A, Bologna J,
Lindquist R (2006). Fraud Auditing And
Forensic Accounting. New Jersey: John
Wiley & Sons Inc.
11. Alves, M.c.G. (2010), "Information
Technology Roles in Accounting Tasks-
A Multiple Case Study", International
Journal of Trade, Economics and
Finance, 1 (1), June 2010.
12. www.ecomstor.com
13. http://en.wikipedia.org/wiki/E-
accounting
14. www.ecomaster.com
15. www.interpristor.com
16. www.amazines.com
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TO STUDY OF HISTORY AND FUNCTIONS OF URBAN CO-OPERATIVE BANKS
DR. SANJAY B. SHINDE
MES, Shri Dnyaneshwar Mahavidyalaya, Newasa,
Dist. Ahmednagar (MS), India (Affiliated to S.P. Pune University, Pune)
Introduction:
The origin of the urban co-
operative banking movement in India can
be traced back to the close of nineteenth
century when, inspired by the success of
the experiments related to the co-operative
movement in Britain and the co-operative
credit movement in Germany such
societies were set up in India, co-operative
societies are based on the principles of co-
operation-mutual help, democratic
decision making and open membership.
Co-operatives represented a new and
alternative approach to organization as
against proprietary firms, partnership firms
and joint stock companies which represent
the dominant form of commercial
organization.
Origin and History Urban co-operative:
The first known mutual aid society
in India was probably the 'Anyonya
Sahakari Mandali' organised in the
erstwhile princely State of Baroda in 1889
under the guidance of Vithal Laxman
Kavthekar. Urban co-operative credit
societies organized on a community basis
to meet the consumption oriented credit
needs of their members. From its origins
then to today, the thrust of UCBs,
historically, has been to mobilise savings
from the middle and low income urban
groups and purvey credit to their members
- many of which belonged to weaker
sections.
The Cooperative Credit Societies
Act, 1904 was amended in 1912, with a
view to broad basing it to enable
organisation of non-credit societies. The
Maclagan Committee of 1915 was
appointed to review their performance and
suggest measures for strengthening them.
The committee observed that such
institutions were eminently suited to cater
to the needs of the lower and middle
income strata of society and would
inculcate the principles of banking
amongst the middle classes. The
committee also felt that the urban
cooperative credit movement was more
viable than agricultural credit societies.
The recommendations of the Committee
went a long way in establishing the urban
cooperative credit movement in its own
right. In the present day context, it fs of
interest to recall that during the banking
crisis of 1913-14 when no fewer than 57
joint stock banks collapsed, there was a
there was a flight of deposits from joint
stock banks to co-operative urban banks.
Maclagan committee chronicled this event
thus: ―As a matter of fact, the cisis had a
contrary effect, and in most provinces,
there was a movement to withdraw
deposits from non-co-operatives and place
them in co-operative institutions, the
distinction between two classes of security
being well appreciated and a preference
being given to the latter owing party to the
local character and publicity of co-
operative institutions but mainly, we think,
to the connection of Government with co-
operative movement.‖ The Government of
India Act in 1919 transferred the subject of
"Cooperation" from Government of India
to the Provincial Governments. The
Government of Bombay passed the first
State Cooperative Societies Act in 1925
"which not only gave the movement its
size and shape but was a pace setter of
cooperative activities and stressed the
basic concept of thrift, self-help and
mutual aid." Other States followed. This
marked the beginning of the second phase
in the history of Cooperative Credit
Institutions.
Key worlds – co-operative, banking,
economy, movement, Urban
Objectives of the study:-
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The objectives of the research paper are as
below:
1. To know the concept of co-operative
banks.
2. To study of Importance of Urban
Cooperative Banks
3. To study Difference between
commercial and co-operative banks.
Research Methodology:-
The primary source of data
collection in this research paper is the
secondary data. The available information
on co-operative and co-operative banks
has been extensively used to complete the
research report. All the available Journals,
Related books, Web, Articles, Publish and
unpublished information and Papers
provided necessary information to the
finalize the research paper.
Definition:-
1.The RBI defines Urban Cooperatives
Banks as ―small sized Co-operatively
organized banking units which operate in
metropolitan, urban and semi-urban
centers to cater mainly to the needs of
small borrowers, viz., owners of small
scale industrial units, retail traders,
professional and salaried classes‖.
2. An urban co-operative Bank is defined
as one which is organized for accepting
deposits from the public, which is usually
repayable by cheques which carry on
normal banking business. Urban Banks are
those credit societies which undertake all
kinds of banking business including the
acceptance of all types of deposits and the
provisions of banking facilities for their
clientele, such as making advances on
personal surety, issue of drafts,
discounting Hundis collection of Bills etc
Objectives of Co-Operative Banks:
1. To attract deposits from members as
well as non-members.
2. To advance loans to members.
3. To act as agent for the joint purchase
of domestic and other requirements of
the members.
5) To undertake collection of bills,
accepted or endorsed by members.
6) To arrange for safe custody of valuable
documents of members.
7) To provide other facilities as provided
by commercial banks.
Functions of Co-Operative Banks
1. Area of Operation - The area of
operation of an urban co-operative
bank is usually restricted by its bye-
laws to a municipal area or a town. In
some cases it exceeds this area.
2. Membership - The membership of
urban co-operative bank is composed
of persons living in urban areas, such
as traders, merchants, salaried and
professional classes etc. The conditions
relating to the membership are laid
down in their bye-laws. The
membership of these urban co-
operative banks varies considerably. In
Tamilnadu, the average membership
exceeded 7000, while in Maharashtra it
was over 3000, in Kerala, it was 2500,
in Orissa 2000, in Madhya Pradesh
1800, in West Bengal it was about 900.
3. Management - The management of
urban co-operative Bank rests in the
board of Directors, who are elected by
General Body, consisting of all the
members. The final authority in all
matters rests with the general body but
actual conduct of the affairs of the
bank rests with the board of directors
and the secretary of the bank. The
tenure of office of the Board of
Directors varies in the states. The usual
practices are to hold elections (a) each
year (b) once in three years, and (c)
each year by rotation for one third of
the board. Holding the elections every
year is not favoured by the study
group. The advantages of holding
elections once in three years are that
expenses are kept at a minimum and
the board of directors has time to learn
the working of the bank. It is also
observed that in a large number of
institutions the same persons were
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elected to the board of directors from
term toperson from contesting election
more than one or two consecutive
terms.
4. Resources - Owned funds and
borrowed funds are main sources of
finance of Urban Co-operative Bank.
Own funds include paid up capital,
accumulated reserves created out of
appropriate from profits. Borrowed
funds cover deposits of members and
non members and loan from central co-
operative banks.
5. Deposits - The percentage of deposits
to working capital varied from state to
state. It was 76% total capital in 1967-
68. These banks have succeeded in
attracting deposits from non members
also because of growing public
confidence in their working. These
banks generally accept current
deposits, saving deposits and fixed
deposits. But with increasing
competition by the commercial banks,
more intensive efforts will be required
by urban co-operative banks to attract
more deposits.
6. Borrowing - Such borrowings of
urban co-operative banks from other
financing agencies are negligible.
These banks generally borrow from
central co-operative bank, while a few
borrowed from the appex banks. The
study group on credit co-operatives in
the Non Agricultural Sector (1963) that
the urban banks should be affiliated
with central co-operative banks and
appex banks should not finance them
directly.
7. Loan Operation - The loan operations
of Urban Co-operative Banks consists
of granting fixed loans or cash credit
loans to their members against
mortgage of unencumbered
immoveable property, or on surety of
one or more persons who are also
members. The member is eligible for
loan against personal security up to 5
to 10 times the share capital paid by
him.
8. Banking and other facilities - UCBs
provide facility of withdrawal of
deposits by cheque and arrange for
remittance of funds to other center.
Some banks collect pensions, pay
regularly insurance premiums of its
members, discount hundis and bills.
9. Investments - The UCBs invest their
surplus money in government and
other trustee securities. Karnatak
(225), Andhra Pradesh (132) Tamil
nadu (131) and West Bengal (111),
Kerala had (67) such banks while all
other states had less than 25 each. Over
the years, Primary (Urban) Co-
operative Banks have registered a
significant progress in growth, in
number and size and volume of
business handled. As on 31st March
2003, there were 2104 UCBs of which
56 were scheduled banks. About 79
percent of these banks are located in
five states – Andhra Pradesh, Gujrat,
Karnatak, Maharashtra and Tamilnadu
References
1. Deshmukh Prasad G.: Working of co-
operative Banks in India : Overview
and Prospects : Kanishks publisher,
New Dhehi
2. International Encyclopaedia of Social
Sciences,. 1972,
3. Indian institute of Banking &
Finance,(1928). Laws of Co-operative
Banking. Macmillan.
4. Ingale M. T., Sale D. L. and
Nawedkar D. S. Economic Analysis
of Multipurpose Co-operative
Societies in Konkan Region of
Maharashtra State : The Maharashtra
Co-operatives Quarterly. Oct 2007.
5. Jugale V. B. (1991) Theories of
Agricultural Finance: Atalantic
Publisher & Distributors.
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HUMAN RESOURCE MANAGEMENT AND PERFORMANCE:
A REVIEW AND RESEARCH AGENDA
VILAS NICHIT
Assistant Professor,
C.T.Bora College,Shirur,
Dist–Pune, Maharashtra.
Abstract
Human resource is the most important asset for any Organization and it the source of
achieving competitive advantage managing human is very challenging as compared to
managing technology or capital and for its effective management organization effective
management system. There is a growing body of evidence supporting an association between
what are termed high performance or high commitment human resource management (HRM)
practices and various measures of organizational performance. However, it is not clear why
this association exists. This paper argues that to provide a convincing explanation of this
association we need to improve our theoretical and analytic frameworks in three key areas.
These are the nature of HRM, and especially the rationale for the specific lists of HR
practices; the nature of organizational performance; and the linkage between HRM and
performance. A model is presented within which to explore these linkages. The existing
literature on HRM and performance is reviewed in the light of this analysis to identify key
gaps in knowledge and help to focus further the research priorities. In the literature, it is
often assumed that traditional, control-oriented HRM systems are increasingly being
replaced by commitment-based HRM systems because the latter generally result in higher
firm performance. However, an HRM system's effectiveness may not depend on an
organization‟s external and internal context, and neither control nor commitment HR systems
are without disadvantages.
Keywords: Human, Performance, Outcomes, Theory, Virtual human resources.
Introduction:
A Human Resource Management
System or HRIS (Human Resource
Information System) is a form of HR
software that combines a number of systems
and processes to ensure the easy
management of a business' employees and
data. Human Resources Software is used by
businesses to combine a number of
necessary HR functions, such as storing
employee data, managing payrolls,
recruitment processes, benefits
administration and keeping track of
attendance records. It ensures everyday
Human Resources processes are manageable
and easy to access. It merges human
resources as a discipline and, in particular,
its basic HR activities and processes with the
information technology field, whereas the
programming of data processing systems
evolved into standardized routines and
packages of Enterprise Resource Planning
(ERP) software. On the whole, these ERP
systems have their origin from software that
integrates information from different
applications into one universal database. The
linkage of its financial and human resource
modules through one database is the most
important distinction to the individually and
proprietarily developed predecessors, which
makes this software application both rigid
and flexible.
Human Resource Information
Systems provide a means of acquiring,
storing, analyzing and distributing
information to various stakeholders. HRIS
enable improvement in traditional processes
and enhance strategic decision-making. The
wave of technological advancement has
revolutionized each and every space of life
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today, and HR in its entirety was not left
untouched. Early systems were narrow in
scope, typically focused on a single task,
such as improving the payroll process or
tracking employees' work hours. Today's
systems cover the full spectrum of tasks
associated with Human Resources
departments, including tracking &
improving process efficiency, managing
organizational hierarchy, and simplifying
financial transactions of all types. In short,
as the role of Human Resources departments
expanded in complexity, HR technology
systems evolved to fit these needs.
Human Resource Management: Nature
Human Resource Management is a
process of bringing people and organizations
together so that the goals of each are met.
The various features of HRM include:
1) It is pervasive in nature as it is present
in all enterprises.
2) It tries to help employees develop their
potential fully.
3) It encourages employees to give their
best to the organization.
4) It is all about people at work, both as
individuals and groups.
5) It tries to put people on assigned jobs
in order to produce good results.
6) It helps an organization meet its goals
in the future by providing for competent
and well-motivated employees.
7) It tries to build and maintain cordial
relations between people working at
various levels in the organization.
8) It is a multi-disciplinary activity,
utilizing knowledge and inputs drawn
from psychology, economics, etc.
Human Resource Management: Scope
The scope of HRM is very wide:
1. Personnel aspect-This is concerned with
manpower planning, recruitment,
selection, placement, transfer,
promotion, training and development,
layoff and retrenchment, remuneration,
incentives, productivity etc.
2. Welfare aspect-It deals with working
conditions and amenities such as
canteens, cr? ches, rest and lunch rooms,
housing, transport, medical assistance,
education, health and safety, recreation
facilities, etc.
3. Industrial relations aspect-This covers
union-management relations, joint
consultation, collective bargaining,
grievance and disciplinary procedures,
settlement of disputes, etc.
Virtual human resources:
Technology has a significant impact on
human resources practices. Human resources
is transitioning to a more technology-based
profession because utilizing technology
makes information more accessible to the
whole organization, eliminates time doing
administrative tasks, allows businesses to
function globally and cuts costs.[30]
Information technology has improved HR
practices in the following areas:
E-Recruiting - Recruiting has mostly been
influenced by information technology.[31]
In
the past, recruiters had relied on printing in
publications and word of mouth to fill open
positions. HR professionals were not able to
post a job in more than one location and did
not have access to millions of people,
causing the lead time of new hires to be
drawn out and tiresome. With the use of e-
recruiting tools, HR professionals can post
jobs and track applicants for thousands of
jobs in various locations all in one place.
Interview feedback, background and drug
tests, and onboarding can all be viewed
online. This helps the HR professionals keep
track of all of their open jobs and applicants
in a way that is faster and easier than before.
E-recruiting also helps eliminate limitations
of geographic location.[31]
Jobs can be posted
and seen by anyone with internet access. In
addition to recruiting portals, HR
professionals have a social media presence
that allows them to attract employees
through the World Wide Web. On social
media they can build the company's brand by
posting news about the company and photos
of fun company events.
Human Resources Information Systems
(HRIS) - Human resources professionals
generally process a considerable amount of
paperwork on a daily basis. This paperwork
could be anything from a department transfer
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request to an employee's confidential tax
form. In addition to processing this
paperwork, it has to be on file for a
considerable period of time. The use of
Human Resources Information Systems
(HRIS) has made it possible for companies
to store and retrieve files in an electronic
format for people within the organization to
access when needed. This eliminates
thousands of files and frees up space within
the office. Another benefit of HRIS is that it
allows for information to be accessed in a
timelier manner. Instead of HR professionals
having to dig through files to gain
information, it is accessible in seconds via
the HRIS. Having all of the information in
one place also allows for professionals to
analyze data quicker and across multiple
locations because the information is in a
centralized location. Examples of some
Human Resources Information Systems are
PeopleSoft, My Time, SAP, Timeco, and
Jobs Navigator.
Training - Technology makes it possible
for human resources professionals to train
new staff members in a more efficient
manner. This gives employees the ability to
access on boarding and training programs
from anywhere. This eliminates the need for
trainers to meet with new hires face to face
when completing necessary paperwork to
start. Training in virtual classrooms makes it
possible for the HR professionals to train a
large number of employees quickly and to
assess their progress through computerized
testing programs. Some employers even
incorporate an instructor with virtual training
so that new hires are receiving the most vital
training. Employees can take control of their
own learning and development by engaging
in training at a time and place of their
choosing, helping them manage their work-
life balance. Managers are able to track the
training through the internet as well, which
helps to reduce redundancy in training and
training costs. Skype, virtual chat rooms, and
interactive training sites are all resources that
enable a more technological approach to
training to enhance the experience for the
new hire.
The major functional areas in human
resource management are:
1. Planning,
2. Staffing,
3. Employee development, and
4. Employee maintenance.
These four areas and their related functions
share the common objective of an adequate
number of competent employees with the
skills, abilities, knowledge, and experience
needed for further organizational goals.
Although each human resource function can
be assigned to one of the four areas of
personnel responsibility, some functions
serve a variety of purposes. For example,
performance appraisal measures serve to
stimulate and guide employee development
as well as salary administration purposes.
The compensation function facilitates
retention of employees and also serves to
attract potential employees to the
organization. A brief description of usual
human resource functions are given below:
Human Resource Planning: In the planning
function, the number and type of employees
needed to accomplish organizational
goals are determined. Research is an
important part of this function because
planning requires the collection and analysis
of information in order to forecast human
resources supplies and to predict future
human resources needs. The basic human
resource planning strategy is staffing and
employee development.
Job Analysis: Job is the process of
describing the nature of a job and specifying
the human requirements, such as skills, and
experience needed to perform it. The end
product of the job analysis process is the job
description. A job description spells out
work duties and activities of employees. Job
descriptions are a vital source of information
to employees, managers, and personnel
people because job content has a great
influence on personnel programmes and
practices.
Staffing: Staffing emphasizes the
recruitment and selection of the human
resources for an organization. Human
resources planning and recruiting precede
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the actual selection of people for positions in
an organization. Recruiting is the personnel
function that attracts qualified applicants to
fill job vacancies. In the selection function,
the most qualified applicants are selected for
hiring from among those attracted to the
organization by the recruiting function. On
selection, human resource functionaries are
involved in developing and administering
methods that enable managers to decide
which applicants to select and which to
reject for the given jobs.
Orientation:Orientationis the first step
toward helping a new employee adjusts
himself to the new job and the employer. It
is a method to acquaint new employees with
particular aspects of their new job, including
pay and benefit programmes, working hours,
and company rules and expectations.
Training and Development: The training
and development function gives employees
the skills and knowledge to perform their
jobs effectively. In addition to providing
training for new or inexperienced
employees, organizations often provide
training programmes for experienced
employees whose jobs are undergoing
change. Large organizations often have
development programmes which prepare
employees for higher level responsibilities
within the organization. Training and
development programmes provide useful
means of assuring that employees are
capable of performing their jobs at
acceptable levels.
Performance Appraisal: Performance
function monitors employee performance to
ensure that it is at acceptable levels. Human
resource professionals are usually
responsible for developing and administering
performance appraisal systems, although the
actual appraisal of employee performance is
the responsibility of supervisors and
managers. Besides providing a basis for pay,
promotion, and disciplinary action,
performance appraisal information is
essential for employee development since
knowledge of results (feedback) is necessary
to motivate and guide performance
improvements.
Career Planning: Career has developed
partly as a result of the desire of many
employees to grow in their jobs and to
advance in their career. Career planning
activities include assessing an individual
employee‘s potential for growth and
advancement in the organization.
Compensation: Human resource personnel
provide a rational method for determining
how much employees should be paid for
performing certain jobs. Pay is obviously
related to the maintenance of human
resources. Since compensation is a major
cost to many organizations, it is a major
consideration in human resource planning.
Compensation affects staffing in that people
are generally attracted to organizations
offering a higher level of pay in exchange
for the work performed. It is related to
employee development in that it provides an
important incentive in employees to higher
levels of job performance and to higher
paying jobs in the organization.
Labour Relations: The term ―labour
relations‖ refers to interaction with
employees who are represented by a trade
union. Unions are organization of employees
who join together to obtain more voice in
decisions affecting wages, benefits, working
conditions, and other aspects of
employment. With regard to labour relations,
the personnel responsibility primarily
involves negotiating with the unions
regarding wages, service conditions, and
resolving disputes and grievances.
Record-keeping: The oldest and most basic
personnel function is employee record-
keeping. This function involves recording,
maintaining, and retrieving employee related
information for a variety of purposes.
Records which must be maintained include
application forms, health and medical
records, employment history (jobs held,
promotions, transfers, lay-offs), seniority
lists, earnings and hours of work, absences,
turnover, tardiness, and other employee data.
Complete and up-to-date employee records
are essential for most personnel functions.
More than ever employees today have a
great interest in their personnel records.
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They want to know what is in them, why
certain statements have been made, and why
records may or may not have been updated.
Performance in Human Resource
Management
The performance of the organization
is always a difficult topic. Each top manager
likes the comparison of the organization with
the main competitors on the market. Each
top manager likes the comparison with the
market benchmark. The organization always
finds measures, which are better than the
competitors ones. However, it says nothing
about the performance of the company. It
says nothing about the performance of
employees. The Organization has to set the
performance standards, the system measures
employees against defined standards. The
Performance management is not about
measuring doing things it is about setting
clear & challenging goals (SMART) and it is
about the regular evaluation of the progress.
The system pushes managers & employees
to cooperate on achievement. The
performance management has to improve the
organization. Meeting the standards is not
about the improvement. it is about the status
quo. The organization without the
development slowly dies. HR has to bring
the tool, which pushes managers and
employees in their creativity. The strategic
agenda has to be challenging and realistic.
The goals have to follow the strategic
agenda. The excellent employees make the
strategic agenda the reality
Conclusion
Human Resource Management
focuses on matching the needs of the
business with the needs and development of
employees. Tarmac depends on its people
because their skills contribute to achieving
its business objectives. Within Tarmac,
every employee has a valuable role to play.
The emphasis is on helping individuals to
work together. Workforce planning is part of
this strategic process, which looks at the
long-term needs across the organisation.
Personal development plans enable every
individual to grow both professionally and
personally within the business. They also
help Tarmac to create a distinct and
important competitive advantage through
selecting and developing highly motivated
and skilled staff who are able to perform at
high levels.
References:
1. "Benefits of Human Capital
Management". Emptrust. Retrieved 8
August 2017.
2. Johnason, P. (2009). HRM in changing
organizational contexts. In D. G.
Collings & G. Wood (Eds.), Human
resource management: A critical
approach (pp. 19-37). London:
Routledge.
3. Collings, D. G., & Wood, G. (2009).
Human resource management: A critical
approach. In D. G. Colligs & G. Wood
(Eds.), Human resource management: A
critical approach (pp. 1-16). London:
Routledge.
4. Paauwe, J., & Boon, C. (2009). Strategic
HRM: A critical review. In D. G.
Collings, G. Wood (Eds.) & M.A. reid ,
Human resource management: A critical
approach (pp. 38-54). London:
Routledge.
5. Klerck, G. (2009). "Industrial relations
and human resource management". In D.
G. Collings & G. Wood (Eds.), Human
resource management: A critical
approach (pp. 238-259). London:
Routledge.Griffin, Ricky. Principles of
Managemen.
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ROLE OF FACULTY DEVELOPMENT PROGRAMS
IN IMPROVING TEACHING AND LEARNING
DR. SUNIL ZAGADE
Associate Professor
Garware College of commerce, Pune, Maharashtra
Abstract-
Lot of efforts and reforms are being introduced by the Indian Government to improve
the quality of education. The quality of higher education definitely depends upon the quality
of its teachers. Just having a good foundation of disciplinary knowledge is not sufficient.
Faculty needs information, literacy and understanding of the interactions, kinds of
knowledge, and an ability to work with others.” They need to continue their own personal,
professional and social learning. Faculty members must have the knowledge and skill to take
up these advances in their teaching and curricular planning. The knowledge sharing will
improve the teaching learning process for the student and benefit the society. Effective faculty
development program provide knowledge and tools that enable the faculty to plan and
implement instructional approaches that are responsive to various learning.
Keywords-: Faculty Development Program, Curriculum, Teaching learning.
Introduction:
Swami Vivekananda said,
―Education is the manifestation of perfection
already in men.‖ The faculty members in
college and Universities must start teaching
in a new and different way. It means that
current generation of professor must break
the centuries old way of teaching and create
a new way that is different and better. They
need to acquire new ideas about teaching
and learning. College and Universities must
plan to provide better training for the
teacher, which would help to develop their
knowledge and positive approach. Effective
faculty development program provide
knowledge and tool that enable the faculty to
plan and implement approaches that are
responsive to various learning. FDP is really
helpful to improve their performance and
confidence among themselves.
Objectives:
The present research paper is undertaken
with the following objective,
1. To understand the concept of FDP.
2. To know the importance of FDP.
Research Methodology:
The present study is based on secondary
method of data collection. The relevant data
collected from,
1. Book of education
2. Website
What is faculty development?
Effective faculty development
program provide knowledge and tool that
enable the faculty to plan and implement
instructional approaches that are responsive
to various learning. An effective faculty
development program should contain self
evaluation. The faculty could contain
assessment of their own strength,
weaknesses and areas for improvement.
To make FDP effective, four factors
are to be taken into account, to help the
amount of learning,
1. Course content.
2. The preferred teaching style.
3. The preferred learning style.
4. Educational Environment.
Apart from these four factors,
1. The skill
2. Knowledge
3. Aspiration
4. Significant for effective education.
Faculty Development in India
One of the most important, if not the
most critical, cornerstone of any educational
set-up is faculties in terms of its adequacy,
composition and quality. Unfortunately, in
many of the institutes in India, the course
content is not satisfactory and as per
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requirement of the industry. There is an
urgent need to move away from the
traditional approach of teaching in classroom
situation to be mentor and facilitator for
facilitating the proceedings. Lack of
adequate research orientation in institutes is
a critical issue. The output of research
becomes input for classroom teaching,
enhancing effectiveness of learning process.
The other crucial issue in the system
is that there is no adequate interaction
between institution and corporate sector.
Current status of faculty development
One of the valuable and existing
changes that have occurred in higher
education in the last few decades is the
steady growth in faculty development
program. The key objectives of FDP are to
improve access, equity and quality of higher
education through planned development of
higher education at the state level.
Every college conducted FDP. The
main object of conducting the FDP is to
develop knowledge of the teacher. FDP is
nothing but as like providing training and
improving skills, abilities of the teacher. It
helps to develop the all round performance
of the teacher. Faculty training is very
important in these days. Training the faculty
to meet the new generation‘s demand and
update themselves is essential. Training is
needed not only in their main subject areas
but also in the areas of how to offer the
content effectively. In higher education
system much emphasis is given for faculty
development for enhancing the quality of
teacher instruction and for a teacher‘s
growth and development.
Importance of Faculty Development
Program
1. Fiscal constraints and call for
accountability- The faculty member‘s
demolistrate greater accountability in
the face of the increasing expenses of
public and private investment in
education.
2. Increasing diversity of student-
Effective faculty must support the
learning of that student with diverse
learning need and develop curricula
and teaching strategies appropriate
for a wide range of learning
environment.
3. The opportunities and challenges of
technology- technologies offer many
opportunities to enhance learning
processes with information. Faculty
members must have the knowledge
and skills to take up these advances
in their teaching and curricular
planning.
4. The new faculty members require
training for institution‘s community
and culture. It helps ensuring the
quality of their skills and abilities.
Faculty Development Program Activity’s
effect on student
If we conduct FDP regularly, it will
be more effective on student.
1. Students improve their knowledge,
attitude and skill.
2. Change in teaching behavior against
students.
3. Change in organizational practice
and student learning.
4. Change in attitude towards teaching
and faculty development.
5. High satisfaction with FDPs.
How if faculty development
accomplished?
With the phenomenal change in
educational and information technology, the
role of the teacher has undergone dramatic
change, he/she is expected to possess skills
and abilities to plan the curriculum, make
rational use of the media technology and
design an assessment strategy.
This is positive only through a systematic
approach to Faculty Development.
Aims of FDP
1. To enrich the knowledge of faculties
through interaction with eminent
personalities from industries and
academics.
2. The knowledge sharing will improve
the teaching learning process to
student and benefit the society.
3. To develop the positive attitude and
approach of the teacher.
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Conclusion
Faculty members in higher education
are experts in their field of study, many of
them may not have been trained in the
practices of effective teaching, how to share
their expertise and how to improve their
knowledge in latest technical developments.
Considering the global and long term view
of higher education, it is clear that faculty
development has become well established. In
addition, the whole profession now has a
strong base of powerful ideas about teaching
and learning in higher education, stronger
than at any time in the past.
References
A. Books
1. Andrew J. H. and others (2013).
Mentoring beginning teachers: What we
know and we don‘t. Teaching and
teacher‘s education.
2. Fink, L. Dee (2013). The current status
of faculty development internationally,
international journal for the scholarship
of teaching and learning: Vol-7.,No.2,
Article 4.
3. Sorcinelli, M. D. (2000). Principles of
good practice: supporting early career
faculty. Washington DC, American
Association of Higher Education.
4. Vivienne C. and others (2010).
Professional development for teachers: A
world of change.
B. Websites:
www.naacindia.org
www.naac.govt.in
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MUDRA BANKING
DR. H. M. JARE
Vice-Principal,
Hutatma Rajguru Mahavidyalaya, Rajgurunagar,
Dist-Pune, Maharashtra.
INTRODUCTION MUDRA:
Micro Units Development and Refinance Agency “Funding The Unfunded” Launched
by Mr. Narendra Modi on 8 April 2015, envisage providing MUDRA loan, up to Rs10 lakh.
Loans are given to those micro institutions which are engaged in manufacturing, trading and
services sectors. MUDRA bank launched with corpus of Rs. 20,000 crores and credit
guarantee of Rs. 3,000 crores. Under this scheme loans are rendered by banks, NBFCs, MFIs
and other financial institutions as mentioned by MUDRA ltd.
KEYWORDS: proprietorships, growth, micro enterprises, financial institutions.
OBJECTIVE OF THE STUDY:
1. To study the government‘s proposed
strategies to get success in completion of
this project.
2. To understand the legal framework
required to avail benefit under this
scheme.
3. This paper is concerned to overview on
scheme MUDRA under PMMY.
4. To understand the need of MUDRA
Yojna.
5. To raised Skill Development.
6. To find out the scope of this scheme.
METHODOLOGY:
The current research paper is mainly
based on secondary sources of data
consisting of various magazines,
newspapers, websites and Government
publications.
MUDRA OFFERINGS:
Under the guidance of Pradhan
Mantri MUDRA Yojana (PMMY), MUDRA
has already shaped its initial Schemes /
products in to three different categories
depending on the nature of business.
Shishu:- Covering loans upto
Rs.50,000 for just starting small business.
Kishore:- If you have set your
business loans above Rs.50,000 and upto Rs.
5 lakh covered in this scheme.
Tarun:- f you need more fund to
raise your good established business, then
you will get loan cover above 5 lakh to 10
lakh.
It would be ensured that around 60%
of the loan flows to Shishu category and the
balance to Kishore and Tarun categories.
With the framework and overall purpose of
growth and development of these schemes
being offered by MUDRA at the rollout
stage have been designed to meet
requirements of different sectors / business
activities as well as business entrepreneur
segments. Brief details are as under:
Mahila Uddyami Scheme (Women
Preneurs), Equipment Finance Scheme for
Micro Units Business Loans for Traders and
Shopkeepers Micro Credit Scheme (MCS),
Refinance Scheme for RRB s/ Cooperative
Banks Sector / Activity Focussed Schemes.
Mahila Uddyami Scheme:- Suitable
and sufficient financial support to the MFIs,
for on lending to women / group of women‘s
/ JLGs / SHGs for creation of qualifying
assets as per RBI guidelines towards
operating micro enterprises as per MSMED
Act.
Equipment Finance Scheme for
Micro Units:- Suitable and sufficient
financial support for on lending to
individuals for purchasing of necessary
equipments.
Business Loans for Traders and
Shopkeepers:- Appropriate and adequate
financial support for on lending to
individuals for running their shops / business
activities and trading/ non –farm income
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generating activities and service enterprises
loan size up to Rs.10 lakh per borrower.
Micro Credit Scheme (MCS):- Support to the MFIs, for on lending to
Individuals / groups of individuals / JLGs /
SHGs for creation of qualifying assets as per
RBI guidelines towards operating micro
enterprises as per MSMED Act.
Refinance Schemes for RRBs /
Cooperative Banks:- Attractive Liquidity of
RRBs / Scheduled Cooperative Banks by
refinancing loan absolute to micro
enterprises as per MSMED Act. Sector /
Activity Focussed Schemes:- To maximise
coverage of beneficiaries to meet
requirements of specific business activities
focused schemes would be rolled out.
Schemes are proposed for:
a. Land Transport Sector/ Activity: Purchase of transport vehicles such as auto
rickshaw, E- rickshaw, 3 wheelers, small
goods transport, taxi, passenger cars etc.
b. Community, Social & Personal
Service Activities: Such as Boutiques,
Beauty Parlours, saloons, tailoring shops,
gymnasium, cycle and motor cycle repair
shop, dry cleaning, courier agents, medicine
shops etc.
c. Food Products Sector: Fruits
/vegetables vendors, papad making, achaar
Making, jam / jelly making, ice and ace
cream making units, biscuit, bread and bun
making units, sweet shops, day catering /
canteen services etc.
d. Textile Products Sector: To give
support for small industries such as knitting,
printing, cotton ginning, computerized
embroidery, stitching, handloom, chikan
work, zari and zardozi work, traditional
embroidery and dyeing, hand work, vehicle
accessories and furnishing accessories etc.
Innovative Offering: MUDRA CARD:-
For the purpose of working capital
limit, it has launched a new product called “
MUDRACARD”, which is debit card and
provides hassle free credit in flexible
manner. It can be used to purchase raw
material and components from registered
producers on an online platform. The card
could be linked with popular savings account
“Pradhan Mantri Jan Dhan Yojana” of
the borrower and the drawls could also be
enabled through the Banks ATM network.
National Payment Corporation of India
(NPCI) has given RuPay branding to
MUDRA Card and also separate BIN/ IIN
for the same, buy which credit history can be
tracked.
Eligible Borrowers:- The applicant
should not be debtor to any bank or financial
institution and should have a adequate credit
track record. The individual borrowers may
be required to have the necessary skills/
experience/ knowledge to commence the
proposed activity. The objective of MUDRA
is to impart financial assistance to the non-
corporate business sector. Under this scheme
loans are given to eligible borrowers to
purchase capital assets / working capital /
marketing requirements and income
generating small business activities in
manufacturing, processing, service sector or
trading etc not for self consumption and
personal needs.
Promoters Contribution:-
Promoters behaves as per the policy
framework of the bank, based on overall
guidelines by RBI (Reserve Bank of India)
Interest Rates and Processing
Charges: promoters like Scheduled
Commercial banks, RRBs and Cooperative
banks wishing to avail of refinance from
MUDRA will have to peg their interest rates,
as advised by MUDRA Ltd, from time to
time. Banks may charge from the borrower
in the name of processing charges as per
their internal guidelines. Processing charges
for Shishu loans are waived by most banks.
Repayment of Loan:-
Term Loan: To be repaid in suitable
instalments as per cash flow of the business.
OD & CC Limit: Repayment on
demand. Renewal and Annual Review as per
internal guidelines of the bank. Tenor of
Assistance: Its tenor will be for a maximum
36 months which will also be associated to
terms of allocation of MUDRA funds by
RBI from time to time.
Availability of the loan: - Mudra
loan under PMMY is accessible at all
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branches across the country. MUDRA loan
is also available at Scheduled Commercial
Bank and Regional Rural Banks. Mudra loan
is also issued by NBFCs / MFIs who are
financing micro enterprises in small business
activities.
Impact on Indian Economy:-
Enhance Production Capacity: Due
to availability of easy finance small
entrepreneurs can use optimum aptitude of
their resources to increase productivity.
Employment Generating:- Mudra
loan scheme increased the confidence of the
hopeful young person to become first
creation entrepreneurs as also of active small
businesses to enlarge their activities. Due to
awareness about PMMY approx. 6 crores
small business units are to be benefited
under this scheme which helps in generating
about 11 crore jobs and the numbers are
increasing day by day.
Boost Liquidity:- To boost liquidity,
a loan amount of Rs. 25000 crore approx.
has already been distributed to almost 38
lakhs people under PMMY scheme.
Raise in GDP:- Non-corporate small
business sector can increase the productivity
of small enterprises with the help of
MUDRA scheme and contribute more to
India‘s GDP.
Women Empowerment:- Mahila
Uddyami Scheme expressly encourages
women entrepreneurs leading to women
empowerment.
Synergies with “Make in India”
Campaign:- MUDRA, being an initiative
for promoting micro enterprises, fits well
with Make in India initiative for supporting
these micro enterprises. This also works for
Start-up India and Stand-up India campaign.
Synergies with National Rural
Livelihoods Mission/ National Urban
Livelihood Mission:-
The National Rural Livelihoods
Mission (NRLM) is set up ―To reduce
poverty by enabling the poor households to
access gainful self-employment and skilled
wage employment opportunities, resulting in
appreciable improvement in their livelihoods
on a sustainable basis, through building
strong grassroots institutions of the poor.‖
Synergies with National Skill
Development Corporation:- Synergizing
with NSDC will help MUDRA in
augmenting the skill sets of the sectoral
players.
Benefit of Mudra Bank:-
It provides hassle free credit in a flexible
manner.
Interest rate charged shall be reasonable
and would be applicable as per RBI
guidelines.
No subsidy is given to the borrowers.
Problems faced in setting up
infrastructure will be resolved.
No processing fee would be charged.
CONCLUSION
Indian Government started MUDRA
scheme to officially support Non –Corporate
Small Business Sector. People living in rural
and interior part have been availing benefit
from MUDRA and it will help the growth of
Indian MSME Sector and also helps to
increase GDP of our country. MUDRA will
create a new confidence in the small scale
entrepreneurs and it also boost young,
educated or skilled workers to expand their
activities .MUDRA scheme specially
encourages women entrepreneurs which
leads to women empowerment and plays a
important role in nation building.
REFERENCES
1. Official website of MUDRA
scheme.(http:// www.mudra.org.in/)
2. Times of India report
(http://timesofindia.indiatimes.com/
business/india-business/Rs-24000-crore-
loans-disbursedunder-Mudra-
Yojana/articleshow/49140570.cms)
3.
http://www.allonmoney.com/economy/pradh
an-mantrimudra-yojana.
4. pmindia.gov.in
5. NDTV business report
(http://profit.ndtv.com/topic/mudra)
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TIME MANAGEMENT: EFFECTIVE TOOL OF MANAGEMENT
DR. V. T. PATE
Assistant Professor,
Arts, Commerce & Science College, Narayangaon,
Taluka-Junnar, District-Pune, Maharashtra, India.
ABSTRACT
In this research paper included that, what is the importance of time management in
our life? Also I give in this research paper to conclude that the effective tool of management
in business organization. Time management helps you have a greater sense of control over
your life, both at work and at home. Time management helps you have a greater sense of
control over your life, both at work and at home. Good time management is essential to
success at university. Planning your time allows you to spread your work over a session,
avoid a „traffic jam‟ of work, and cope with study stress. Studying at university often involves
meeting conflicting deadlines, and unless you plan ahead, you‟ll find it impossible to manage.
To meet the demands of study you need to spread your workload over a session. Work out
what needs to be done and when. Work out how to use your available time as efficiently as
possible. At a minimum, a day planner is a device that includes a calendar, space to write
“to-do” lists, and space to write telephone numbers, addresses, and other basic
identifying/reference information. It can be a paper-and-pencil model, as with Franklin
planner, Day Timer, or Planner Pad brands. It can be a fancy electronic organizer such as a
Palm Pilot, or it can be time management software on a laptop or desktop computer.
Electronic organizers have a number of advantages. They are compact; they provide audible
reminders that can serve as memory management aides, they can sort, organize, and store
more information more efficiently than paper and pencil planners; and they can easily
exchange information with office and home computers.
KEY WORDS - Time Management, Planning, Controlling, Day Time, Success, Work
Efficiency, Business Organisation.
INTRODUCTION
“Your day planner should be the only
planning calendar for everything you
do…”
Good time management is essential
to success at university. Planning your
time allows you to spread your work over
a session, avoid a ‗traffic jam‘ of work,
and cope with study stress. Studying at
university often involves meeting
conflicting deadlines, and unless you plan
ahead, you‘ll find it impossible to manage.
To meet the demands of study you need to
spread your workload over a session.
Work out what needs to be done and when.
Work out how to use your available time
as efficiently as possible.
At a minimum, a day planner is a
device that includes a calendar, space to
write ―to-do‖ lists, and space to write
telephone numbers, addresses, and other
basic identifying/reference information. It
can be a paper-and-pencil model, as with
Franklin planner, Day Timer, or Planner
Pad brands. It can be a fancy electronic
organizer such as a Palm Pilot, or it can be
time management software on a laptop or
desktop computer. Electronic organizers
have a number of advantages. They are
compact; they provide audible reminders
that can serve as memory management
aides, they can sort, organize, and store
more information more efficiently than
paper and pencil planners; and they can
easily exchange information with office
and home computers.
Do you schedule many
appointments on the hour or half-hour?
Then use a clear daily view. Are you
making ―to do‖ lists but not scheduling
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many appointments? Perhaps a weekly
view with a lot of space for lists is needed.
Your day planner should be the only
planning calendar for everything you do
(i.e., work, home, personal). Using
separate calendars at home and at the
office may become confusing and
overwhelming; you will inevitably forget
to transfer entries from one calendar to the
other and miss appointments or important
commitments.
After selecting a planner, the next
step is to start keeping it in a single,
accessible location at home and at work,
so you will always know where to find it.
The location should be clearly visible from
a distance, even in a cluttered room or on a
messy desk. Convenient locations might
be next to the telephone, on a table near
the front door, or on the desk at the office.
If the day planner has a strap, it might be
hung on a hook next to the front door,
above the telephone, or together with the
car keys. Carry it to and from work, and
practice keeping it in the designated
locations for a week.
OBJECTIVES OF THE RESEARCH
STUDY
The said research study was carried out
with following objectives in view:-
1. To study the effective Time
Management.
2. To study the strategies for better Time
Management.
3. To study the major steps to successful
Time Management.
HYPOTHESIS
The main hypothesis of the said
research paper is as follows:
H 1 A great deal of time management is
really about taking responsibility for
your learning.
H 2 The best plan is to be aware of how
much time you have and to manage it
effectively.
RESEARCH METHODOLOGY
For the present research study the
data pertaining to the above objectives was
collected and reviewed the literature on the
topic concerned. The literature was thus
collected by visiting various libraries.
Some Government offices were also
visited for getting office record and
statistical data. The secondary data is also
collected from various websites.
With the above objectives keep in
mind the instructed Interview Method and
Desk Research Method was basically
adopted. The Secondary Data is collected
from various reference books related to
Management, Time Management,
Business Management, Strategic
Management, Planning Management,
Commerce & Management, and Marketing
& Finance etc. For said research study
secondary data is also collected from the
National and International Research
Journals which are related to Commerce,
Management, Marketing and Time
Management.
TIME MANAGEMENT EFFECTIVE
TOOL OF MANAGEMENT
Before you undertake study, you
need to realistically assess all the demands
on your time. Consider paid employment,
family duties, sport, leisure or civic
commitments. Good time management
will not help if you are overcommitted. If
you study full time, spend more than about
12 hours per week in paid employment and
spend every evening at the gym, you won‘t
have much time to study. If you suspect
you might have taken on too much,
reassess your commitments, priorities and
compromise. Be realistic about the amount
of time an assignment will take you to
complete. Different tasks require different
amounts of preparation time. For example,
you might only need a few hours to
prepare for a tutorial, but writing an
assignment will take significantly longer.
You can‘t produce good, well written work
unless you give yourself enough time to
think research and write. Brilliant
assignments are not written the night
before, so start them in good time.
Some weeks will be busier than
others, and unforeseen things can happen.
Remember that a timetable is only a plan
or a guide. If you plan a study time slot
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and miss it, don‘t panic look at the
schedule and rearrange your time. A great
deal of time management is really about
taking responsibility for your learning. The
best plan is to be aware of how much time
you have and to manage it effectively. Be
realistic about your time and what you can
do with it.
TEN STRATEGIES FOR BETTER
TIME MANAGEMENT
Finding a time management
strategy that works best for you depends
on your personality, ability to self-
motivate and level of self-discipline. By
incorporating some, or all of the ten
strategies below, you can more effectively
manage your time.
1. Know How You Spend Your Time :
Keeping a time log is a helpful way to
determine how you are using your time.
Start by recording what you are doing
for 15-minute intervals for a week or
two. Evaluate the results. Ask if you did
everything that was needed; determine
which tasks require the most time;
determine the time of day when you are
most productive; and analyze where
most of your time is devoted job,
family, personal, recreation, etc.
Identifying your most time consuming
tasks and determining whether you are
investing your time in the most
important activities can help you to
determine a course of action. In
addition, Having a good sense of the
amount of time required for routine
tasks can help you be more realistic in
planning and estimating how much time
is available for other activities.
2. Set Priorities : Managing your time
effectively requires a distinction
between what is important and what is
urgent. Experts agree that the most
important tasks usually aren‘t the most
urgent tasks. However, we tend to let
the urgent dominate our lives. Covey,
Merrill, and Merrill categorize our
activities into four quadrants in their
Time Management Matrix: urgent, not
urgent, important and not important.
While activities that are both urgent and
important must be done, Covey etc.
suggests that we spend less time on
activities that are not important in order
to gain time to focus on activities that
are not urgent but important. Focusing
on these important activities allows you
to gain greater control over your time
and possibly reduce the number of
important tasks that do become urgent.
3. Use a Planning Tool : Time
management experts recommend using
a personal planning tool to improve
your productivity. Examples of personal
planning tools include electronic
planners, pocket diaries, calendars,
computer programs, wall charts, index
cards and notebooks. Writing down
your tasks, schedules, and memory
joggers can free your mind to focus on
your priorities. Auditory learners may
prefer to dictate their thoughts instead.
The key is to find one planning tool that
works for you and use that tool
consistently.
4. Get Organized : Most people find that
disorganization results in poor time
management. Professional organizers
recommend that you first get rid of the
clutter. A frequently used method is to
set up three boxes labeled ―Keep‖ –
―Give Away‖, ―Toss.‖ Separate the
clutter by sorting items into these
boxes. Immediately discard items in
your ―Toss‖ box. Your ―Give Away‖
box may include items you want to sell,
delegate, or discontinue so find a
method to eliminate these items such as
a yard sale, charitable donation, or gifts
to friends or family members outside
your home.
5. Schedule Your Time Appropriately :
Even the busiest people find time for
what they want to do and feel is
important. Scheduling is not just
recording what you have to do (e.g.,
meetings and appointments), it is also
making a time commitment to the
things you want to do. Good scheduling
requires that you know yourself. Using
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your time log, you should have
determined those times during the day
when you are most productive and alert.
Plan your most challenging tasks for
when you have the most energy. Block
out time for your high priority activities
first and protect that time from
interruptions.
6. Delegate: Get Help from Others :
Delegation means assigning
responsibility for a task to someone
else, freeing up some of your time for
tasks that require your expertise.
Delegation begins by identifying tasks
that others can do and then selecting the
appropriate person to do them. You
need to select someone with the
appropriate skills, experience, interest,
and authority needed to accomplish the
task. Be as specific as possible in
defining the task and your expectations,
but allow the person some freedom to
personalize the task.
7. Manage External Time Wasters :
Your time may be impacted by external
factors imposed by other people and
things. You can decrease or eliminate
time spent in these activities by
implementing some simple tips listed
below.
8. Avoid Multi-tasking : Recent
psychological studies have shown that
multi-tasking does not actually save
time. In fact, the opposite is often true.
You lose time when switching from one
task to another, resulting in a loss of
productivity. Routine multi-tasking may
lead to difficulty in concentrating and
maintaining focus when needed.
IMPORTANT STEPS TO
SUCCESSFUL TIME MANAGEMENT
1. Clarify your objectives. Put them in
writing. Then set your priorities. Make
sure you‘re getting what you really
want out of life.
2. Focus on objectives, not on activities.
Your most important activities are
those that help you accomplish your
objectives.
3. Set at least one major objective each
day and achieve it.
4. Record a time log periodically to
analyze how you use your time, and
keep bad time habits out of your life.
5. Analyze everything you do in terms of
your objectives. Find out what you do,
when you do it, why you do it. Ask
yourself what would happen if you
didn‘t do it. If the answer is nothing,
then stop doing it.
6. Eliminate at least one time-waster from
your life each week.
7. Plan your time. Write out a plan for
each week. Ask yourself what you
hope to accomplish by the end of the
week and what you will need to do to
achieve those results.
8. Make a to-do list every day. Be sure it
includes your daily objectives,
priorities, and time estimates, not just
random activities.
9. Schedule your time every day to make
sure you accomplish the most
important things first. Be sure to leave
room for the unexpected and for
interruptions. But remember that things
that are scheduled have a better chance
of working out than things that are
unscheduled.
10. Make sure that the first hour of your
workday is productive.
11. Set time limits for every task you
undertake.
12. Take the time to do it right the first
time. You won‘t have to waste time
doing it over.
13. Eliminate recurring crises from your
life. Find out why things keep going
wrong. Learn to pro act instead of
react.
14. Institute a quiet hour in your day a
block of uninterrupted time for your
most important tasks.
15. Develop the habit of finishing what
you start. Don‘t jump from one thing
to another, leaving a string of
unfinished tasks behind you.
16. Conquer procrastination. Learn to do it
now.
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17. Make better time management a daily
habit. Set your objectives, clarify your
priorities, plan and schedule your time.
Do first things first. Resist your
impulses to do unscheduled tasks.
Review your activities.
18. Never spend time on less important
things when you could be spending it
on more important things.
19. Take time for you time to dream, time
to relax, and time to live.
20. Develop a personal philosophy of time
what time means to you and how time
relates to your life.
CONCLUSION
Regardless of the time
management strategies you use, you
should take time to evaluate how they have
worked for you. Ask yourself a few simple
questions: Do you have a healthy balance
between work and home life? Are you
accomplishing the tasks that are most
important in your life? Are you investing
enough time in your own personal
wellbeing? If the answer is ―no‖ to any of
these questions, then reconsider your time
management strategies and select ones that
work better for you. Remember that
successful time management today can
result in greater personal happiness;
greater accomplishments at home and at
work, increased productivity, and a more
satisfying future.
REFERENCES
1. Covey, S. R. (1989). The 7 habits of
highly effective people. New York.
2. Nadeau, K. G. (1996). Adventures in
fast forward: Life, love and work for
the ADD adult. New York.
3. Robin, A. L. (2002). Lifestyle issues.
In S. Goldstein & A. Teeter Ellison
(Eds.), Clinician‘s guide to adult
ADHD: Assessment and intervention
(pp. 280-291). New York.
4. Barkley, R.A. & Gordon, M. (2002),
Assessment and intervention (pp. 43-
69). New York.
5. Beckwith, S. (2006, July). Unleash
Your PDA‘s Power. Black Enterprise,
36(12), 66.
6. Covey, S. R., Merrill, A. R., & Merrill,
R. R. (1994). First Things First: To
Live, to Love, to Learn, to Leave a
Legacy. New York.
7. Dodd, P., & Sundheim, D. (2005). The
25 Best Time Management Tools and
Techniques: How to Get More Done
Without Driving Yourself Crazy. Ann
Arbor, MI: Peak Performance Press,
Inc.
8. Successful Time Management, MTD
Training & Ventus Publishing Aps,
2010, ISBN-978-87-7681-662-9
9. www.plannerpads.com
10. www.davidco.com
11. www.mindtools.com
12. www.timetimer.com
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DIRECT BENEFITS TRANSFER (DBT) IN INDIA: ISSUES AND CHALLENGES
DR. A. A.JAGADALE Assistant Professor
Arts, Com. & Science College, Narayangaon,
Tal: Junnar, Dist: Pune, Pin: 410504, Maharashtra, India.
Abstract
Direct Benefits Transfer (DBT), as a new public policy, has been acknowledged by
various segments of the society as an initiative for inclusiveness. It is a mechanism through
which the target beneficiaries will get the subsidy amount in cash that shall be credited
directly to their accounts by linking all the transactions to Aadhaar. DBT envisages a switch
from the present subsidy scheme to transfer of benefits directly to Aadhaar seeded bank
accounts of the beneficiaries. It is an earnest endeavour to streamline the subsidy mechanism
in India. The scheme has potential to control much rooted corruption in public distribution
system, by reducing the intermediate cost, by improving the efficiency of the delivery system
and by getting rid of the misuse of funds. Its success, in fact depends upon institutional and
infrastructural development in the rural and urban as well through which the scheme can be
better implemented. DBT should be leak proof and free from other malpractices and
irregularities and needs to be implemented effectively and should concede all kind of policy
reforms in the decision making process. As a comprehensive socio-economic protection
package, DBT will certainly fulfill the living expectation of the government and people
specially the deprived and hapless through „Aap Ka Paisa Aap Ke Haath‟.
Key words: Direct Benefits Transfer, Public Policy, Subsidy, Mechanism and Malpractices
Introduction
Public policy and its implications
have a tremendous impact on our economic
growth, and social developments world
over. However, these policies need to be
refurbished and customized to meet the
current and evolving needs of the people.
Thus, in the rapidly changing environment,
understanding and evaluating public policies
and other developmental issues; are cardinal
and crucial for an inspiring and fulfilling
public life. The onus of evolving meaningful
public policies lies with the government, but
judging their effectiveness and utility lies in
the realm of researchers. The policy debate
is not about the choice between good or bad
policy but is rather regarding the assessment
of their positivity and effectiveness over one
another. This will persist, especially when
the new policy overtakes the old and hence
debate and discussion will continue to incite
the matter unless implemented and
evaluated in the context of set goals and
welfare objectives. Policy matrix which is
the corner stone of policy decision making
process, must delve exclusively into the
issues, consequences of the policy
outcomes. The direct benefits transfer as a
substitute to the traditional subsidy scheme
and as a policy alternative, always has effect
on the masses especially on the deprived and
marginalized.
Objectives of the Study
1. The main objective of the study is to
understand the concept of Direct
Benefits Transfer.
2. To study the expanded scope of Direct
Benefits Transfer in India.
3. To study the benefits of Direct Benefits
Transfer.
4. To study the core concerns and
Challenges of Direct Benefits Transfer
in India
Research Methodology
The present research study uses the
most recent available published secondary
data. To achieve the above stated objectives,
the secondary data was used. The secondary
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data that are mainly used are published in
annual reports of various organizations and
survey reports of leading business
magazines. For the said research study the
secondary data is also collected from the
various National and International Research
Journals which are related to Commerce,
Management, Marketing and Finance. For
the said research study the data pertaining to
the above objectives was collected and
reviewed the literature on the topic
concerned. The literature was thus collected
by visiting various libraries. The Secondary
data is also collected from various websites.
Overview of Direct Benefits Transfer
(DBT) In India
The praxis of policy should be
designed after understanding the needs and
aspirations of the economy, in context of
socio-economic environment and public
welfare. Direct Benefits Transfer, as a new
policy framework, has been acknowledged
from various corners as the demand of the
day. It is a process through which the target
beneficiaries will get the subsidy amount in
cash that shall be directly credited to their
accounts by linking transactions to Aadhaar.
Cash amount is calculated by finding the
difference between the market price and
subsidized price in proportion to the quantity
purchased from the market. It is an earnest
endeavor to streamline the subsidy
mechanism in India. The scheme has
potential to control much rooted corruption
in public distribution system, by reducing
the intermediate cost, improving the
efficiency in delivery system and by
eliminating the misuse of funds and reduce
the role of petty politician and other
intermediaries. This will definitely reduce
the delivery cost and subsidy bills by better
targeting and putting off various
malpractices and irregularities. The scheme
may not fully eliminate the bottlenecks and
constraints in the process but will certainly
bring paramount changes in the delivery
system. It will prevent growth of black
marketing as well as growth of secondary
market. DBT as a concept has been
borrowed from Latin America and translated
according to the need and context of socio-
economic environment of India. This policy
has been time tested and a few countries
have already adopted DBT apart from Latin
America, and have experienced a mix bag of
effects on their people and economy. The
scheme has to be framed and implemented
with a few institutional and infrastructural
amendments and moreover firm
improvement is required to make it more
effective and efficient. Even then, coming
out with such a contemplative programme,
Government of India intends to nullify the
challenges that are inherent in the previous
policy and is trying to enhance the benefits
directly to the people by implementing
DBT.
Expanded scope of Direct Benefits
Transfer
Direct benefit Transfer (DBT) is an
ambitious scheme, launched by the Union
Government which aims to eliminate
poverty from the country and improve the
economic standard of individuals and their
families. As per this scheme, money is
transferred directly into bank accounts of the
beneficiaries in the form of subsidies on
LPG and Kerosene, pension payments,
scholarships and employment guarantee
scheme payments etc. Basic idea behind
DBT is to cut down wastage, duplication
and leakages and to enhance efficiency.
Expanded scope of DBT
Cash
Transfer to
Individual
Beneficiary
E.g: PAHAL
In-kind
Transfer
to
Individual
Beneficiar
y
E.g: PDS
Other
Transfer/
Processes
E.g: ASHA
Subsidy
Schemes
Welfare
schemes
with
Cash
Compone
nts
Stipends
&
In-kind
goods/
products
Training
& Skills
Develop
ment
More
example
s
Payments
to service
enablers
Payments
to third
parties for
providing
services
Examples
Aanganwa
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Scholarshi
ps
Cash
Awards
for
excellence
Pensions
& Cash
Benefits
Mid- day
Meal
Swachh
Bharat
Digital
Sakshart
a
Abhiyan
di workers
NGOs
Direct Benefits Transfer (DBT): Benefits
Any paradigms shift in policy that has
benefited the masses socially and
economically, has always got the top
priority in the developmental agenda of a
country. The three ‗f‘ i.e. funds, functions,
and functionaries are not optimally operated
during the traditional subsidy scheme
through PDS; which leads to leakage of
benefits that is unable to percolate among
the masses. To overcome such constraints
and challenges in the process, DBT has been
acknowledged as an upgraded scheme than
the before.
1. Benefits transfer is the part of the
iceberg but its positive effects can be
understood in a better manner only when
the spending pattern and socio-economic
behavior of the beneficiaries will be
tested from time to time.
2. This can be successfully implemented
because it is globally tested in the line of
developing nations. Also, it will be more
effective as this scheme has been already
been evaluated and verified through
various pilot projects.
3. This scheme definitely gives an impetus
to much talked error-free inclusive
development especially in the context of
development of poor and unprivileged
sections. It will definitely bring down
the corruption and improve the new
public distribution system by eliminating
the intermediaries and limiting the
political interference.
4. Injection of purchasing power may result
in multiplier effects through which more
income and employment can be
generated by boosting indigenous
demand in the rural sector.
5. Recent media hype and socio-political
policy debate brought an unprecedented
awareness among the public and will
definitely disseminate information
among the beneficiaries and will spread
public awareness to a great extent.
6. It will certainly inject money and the
purchasing power in rural sector in
particular. This will raise the standard of
living of rural people and will help in
controlling outward migration at a large.
This scheme will no doubt enhance the
purchasing power of the beneficiaries
and augmenting in developing a positive
approach in their spending habits.
7. Various flaws like duplication of work
and poor delivery system of the existing
scenario of subsidization can cause a
threat to PDS, but proposed plan of DBT
will reduce the gap and flaw in delivery
system through improved delivery
mechanism with the help of UIDAI.
Implementation of UIDAI card has
brought unprecedented transparency in
the administrative and delivery system.
Direct Benefits Transfer (DBT): Core
Concerns and Challenges
Although the scheme comes with
best of intentions, there is a spring of
―impractical idealism‖ in the way proposal
has been drafted and no fool proof measures
have been taken to cater the benefits as
desired and perceived.
a) The population of various states, those
are staying in remote villages, mainly
consists of farmers, labourers and tribal
people. They may refrain from gaining
the benefits from BT as desired because
they lack modern day facilities like
banking, electricity and proper
connectivity. This may pose a threat in
implementation of the schemes in these
areas.
b) Identification of target demography is
the biggest challenge in our country,
hence precautionary step has to be taken
by administrative machinery of each
state while issuing the UID card, or
otherwise DBT scheme will become
futile.
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c) Studies conducted by various NGOs and
research organizations reveals that
people of states like Bihar, Odisha and
Madhya Pradesh prefer food to cash.
Besides this, the research revealed that it
was mostly female who preferred food to
cash than their male counterpart.
d) Lack of awareness and information
among the beneficiaries may pose threat
to the success of this scheme. Lack of
understanding about the programme
among rural masses and other
beneficiaries may lead to financial
malpractices and irregularities at the
point of delivery of services at the grass
root level.
e) Error of inclusion and error of exclusion
in the process of identifying poor is the
serious concern for the policy makers
which cause serious leakages and
infiltrations in various schemes.
Furthermore, various committee reports
and planning commission reports on
defining poverty and poverty line is also
cause policy debate and create serious
threat in implementing the program.
f) Bulk purchase from the native farmers
and venders which was in earlier
provision of PDS has supported the fact
with perennial demand and desired price.
But the scenario is changing because
Direct Benefits Transfer is acting as a
substitute of food to cash.
g) The scheme much talks about the
operational efficiency and
implementation than the public needs
and the wellbeing of the people. Besides,
this scheme may not necessarily bring
benefits to all the segments as desired
due to multiplicity of culture, tradition,
location and literacy rate of various
states.
h) The economic effects of the scheme may
prompt and motivate unnecessary
consumption and may encourage people
to refrain from work and prefer leisure to
work and may disrupt productive
activities.
i) The scheme is implemented through an
UID card; hence its success depends
upon how effectively the government
addresses the issue of UID cards. Studies
conducted so far on UID card reveals
that there is a delay in delivering the
cards to their owners. Many of the
entitled beneficiaries have not received
the card till date which is causing serious
implementation challenge for the
scheme.
j) Although constructive criticism is going
on, still this endeavor of the government
and its resultant benefits can only be
better harvested only when all the state
governments and other stakeholders will
show their contribution and commitment
in the scheme.
Significant Suggestions
1. There is a need to promote financial
literacy among the rural poor and
inculcate banking habits among them for
the success of this scheme.
2. The entire process of fund transfer should
be automatic and error-free; otherwise
rent seeking behavior of the delivery
agents or officials may crop up in the
name of facilitating services to the
ultimate beneficiaries.
3. There is a need to evaluate the tradeoff
benefits between existing subsidy
schemes and DBT in a scientific manner,
so as to assess the degree of success and
to measures the effectiveness of the
program.
4. There should not be any unnecessary
delay and harassment at the time of cash
withdrawal by the beneficiaries,
otherwise dishonesty will emerged and
the system will become auto-defective.
5. Need of political consensus among
various political parties and a touch of
expertise in shaping the policy, to make
it a socially viable option.
6. Any decision taken at macro level must
act rationally and should exercise
various test on available alternatives to
cater the need of the nation.
7. Only the involvement of civil society and
NGO‘s in the scheme can make DBT an
effective scheme.
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Conclusions
As a comprehensive socio-economic
protection package, DBT will certainly
fulfill the living expectation of the
government and people specially the
deprived and hapless through ‗Aap Ka Paisa
Aap Ke Haath‘. We hope more schemes
shall be covered under DBT and the whole
country and its people will get the benefits
directly without any delay or deficiencies.
However, just creation of system, structure
and institutions for better economic
development by providing autonomy
through decentralization and participatory
management of various schemes is not
enough rather to create a sustainable people-
centered environment in which the various
segments of the society can exercise their
voice and choice and will get the benefits
from the schemes. The beneficiaries should
understand and enjoy their rights and can get
involved in the decision making process for
better inclusiveness. In fact, democracy
loses its shine if the poorer and the deprived
masses of a country are not able to share the
progress and prosperity generated by that
country, which is visible in various sectors.
Hence; deliberate effort has to be made by
the government in various quarters of
planning for the betterment of deprived and
hapless segments of the society. In this
regards, DBT is a welcome step in creating
enabling environment where people would
enjoy long, healthy and creative lives.
References
1. PPT, Direct Benefits Transfer (System,
Key Steps, Operation, Schemes), For
Conference of District Collectors on
Direct Benefit Transfer (DBT), Phase II
Rollout, Planning Commission,
Government of India, 29th April, 2013.
2. Devesh Kapur, P. M. 2008. More on
direct cash transfers. Economic &
Political Weekly, 85-87.
3. Dr. Amiya Kumar Mohapatra, Direct
Benefits Transfer (DBT) In India: An
Initiative for Inclusiveness, International
Journal of Technical Research and
Applications e-ISSN: 2320 -8163,
Special Issue 21 (July, 2015), PP. 5-8.
4. International Food Policy Research
Institute. 2012, Global hunger Index- the
challenge of hunger, ensuring
sustainatale food security under land,
water and energy stresses.
5. Hand Book on Direct Benefit Transfer,
Planning Commission, Government of
India, 2013.
6. Laura, B. Rawlings., a. G. 2005.
Evaluating the impact of conditional
cash transfer programs. The World Bank
Research Observer, 20(1), 29-55.
7. Kannan, K. P., S. M. 2000. Concerns on
food security. Economic and Political
Weekly, 35(45), 3919-3922.
8. Information and Guidance, Direct
Benefits Transfer (DBT), Planning
Commission, GOI.
9. Jha, P. a. 2013. Securing food for all is it
really difficult to afford. Economic and
Political Weekly, XLVIII (4).
10. Das, Jishnu, Q.T. D. 2005. Reassessing
conditional cash transfer programs. The
World Bank Research Observer, 20(1),
57-80.
11. Direct Benefits Transfer Scheme Docs. /
Pdf -Government of India.
12. Bryant J. H. 2009. Health Kenya's Cash
transfer program: protecting the health
and human rights of orphans and
vulnerable children. Health and Human
Righis, 11(2).
13. www.dbtportal.nic.in
14. www.planningcommission.nic.in.
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M-COMMERCE & ITS APPLICABILITY
DR.REKHA APPASAHEB KADHANE
Assistant Professor & Faculty Incharge
Adv.M.N.Deshmukh Arts, Science &Commerce College Rajur,
Tal-Akole, Dist-A‘Nagar, Maharashtra.
Introduction
‗Commerce‘ is the trading of
‗something‘ of value between two entities.
That ‗something‘ may be goods, services,
information, money, or anything else the two
entities consider to have value.1 Trading was
the main facility in earlier times with barter
facility for goods and services. Later,
currency was introduced as standardized
money to facilitate a wider exchange of
goods and services. Today‘s era is an
information era and the world is passing
through an Information revolution. One of
the profound consequences of the
information revolution is its influence on
how economic value is created and
extracted. Today the information is more
easily accessed, absorbed, arranged and is
priced in different ways. Markets are
expanding from regional to global.
Knowledge is replacing land, labour and
capital as the key value driver. Intelligent
networks and virtual spaces are limiting the
need for surface and air travel. With the
technological progression particularly in
computers and Internet field has led to the
birth of electronic commerce (e-commerce)
which enabled the business processes to be
more simplified, efficient, quick and
accurate resulting in improved productivity
with higher satisfaction level to the
customers. Also, improved Processes
resulted in reduced cost of production and
transaction cost and Therefore the
profitability of businesses increased
manifolds. The emerging Wireless and
mobile networks have added another
dimension of mobility and extended e-
commerce to another research and
application subject called Mobile Commerce
popularly known as M-Commerce.
M-Commerce is the buying and
selling of goods and services through
wireless handheld devices such as mobile
telephone and personal digital assistants
(PDAs).2 M-Commerce is a platform where
a mobile customer can avail various banking
and other related commercial facilities
through his mobile phone. M Commerce is
not the transaction itself. It provides services
and information, which can trigger a future
transaction. The scope of M-Commerce
therefore goes beyond the initial one time
commercial transaction. The main areas of
M Commerce use are in text messaging or
SMS, mobile payment, financial &banking
services, logistics, goods/services buy/sell,
information services and wireless customer
relationship management etc.
Objectives: -
1. To study Concept of M commerce
2. To study Benefits of M-commerce
3. To study Types of M-Commerce
Key words:- M commerce, M banking, E-
Money
Research Methodology:- Secondary data is
use for this research. Information collected
from various Books, Periodicals & Webs.
Benefits of M-Commerce:
The benefits of M-Commerce with
respect to customers, merchants and banks
are as below:
1. Ubiquitous Personalized service –
anywhere, anytime
2. Remote payment for utility bills,
insurance premiums, Credit card, bills,
EMIs etc
3. Integration with existing payment
systems e.g. Credit/debit card payment
option
4. Promotion of Location based services
5. Faster transaction time
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6. New business opportunities for
stakeholders
7. Point of Sale(POS) device may not
require
8. Branding and business opportunities for
banks
9. Higher volume in banking with less cash
transaction
10. Penetration into cash dominated category
11. Help developing customer loyalty
12. Reduction in cost of infrastructure and
usages
M-Commerce Services – Concept:-
M-Commerce Services Infrastructure
to change the scenario of retail Applications
adopting Wireless Technology on GSM /
CDMA. Ready platform is offered for
deploying M Commerce Services by
different organizations like:
a. Banks and Financial Institutes
b. Cellular Operators
c. Government
d. Loyalty Providers
e. Various Corporate
M-Commerce Infrastructure
integrates front end applications, like
Wireless Point of Sale Terminals, Micro
Finance, vCash, e-purse, Bill Payment,
Prepaid Top up Vouchers, Vending Machine
operation, e-Governance etc. offered by
different organizations with backend
applications offered by other organizations,
required to establish the working model.
Being a manufacturer, E Cube India offers
different hardware to support the
applications desired by the client.
Types of M-Commerce:-
The M-Commerce can be classified
broadly in the three main categories:-3
1.M-Payment: Through Credit/debit
cards: Mobile phones linked to credit/debit
cards can be used to make payments. e.g. M-
payment applications like mChek etc.
2.E-Money:Cash loaded in the mobile
phones. Consumers use this virtual cash as
real value for all types of transactions. E.g.
Prepaid cash card, recharge voucher amount
etc.
3.M-Banking:Mobile phone used for
accessing the bank accounts. All payments
are routed through the bank. e.g. Balance
query, share trading alert, banking
transactions etc.
M-Banking platforms/services agencies:-
The M-Commerce/M-Banking
services are run by many Mobile banking
application service providers with their tie-
ups with banks and the telecom service
providers. Different technologies and types
of applications are available from them on
the mobile platform; each offering a matrix
of advantages and disadvantages, especially
when the needs of the disadvantaged
segments are taken into consideration. Some
of the names of M-Commerce
platforms/services are mChek, etc. From
these platforms like m-check, ngpay require
Java enabled handsets & GPRS facility to
operate M-Commerce, while platform like
PayMatedoes not require these. Most of the
M-Banking transactions are between the
bank accounts of the customers. Some of the
platform like ‗Green Money transfer ‗allows
person to person transfer through their bank
accounts. Bharat Sanchar Nigam Limited
(BSNL) has also plans to launch a mobile
banking platform with the help of
Department of Post wherein a mobile
subscriber will be able to send money orders
electronically through SMSs which will be
encashable at all post offices in the country.
Existing framework for M-Banking:
Practically, Indore has implemented
M-Banking services. Following are the
guidelines given by RBI.
1. Transaction limit: Banks are now
permitted to offer this service to their
customers subject to a daily cap of Rs
50,000/- per customer for both funds transfer
and transactions involving purchase of
goods/services. Presently, such transactions
are subject to separate caps of Rs 5000/- and
Rs 10000/ -respectively.
2. Technology and Security Standard:
Transactions up to Rs 1000/- can be
facilitated by banks without end-to-end
encryption. The risk aspects involved in such
transactions may be addressed by the banks
through adequate security measures.
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3. Remittance of funds for disbursement
in cash: In order to facilitate the use of
mobile phones for remittance of cash, banks
are permitted to provide fund transfer
services which facilitate transfer of funds
from the accounts of their customers for
delivery in cash to the recipients. The
disbursal of funds to recipients of such
services can be facilitated at ATMs or
through any agent(s) appointed by the bank
as business correspondents. Such fund
transfer service shall be provided by banks
subject to the following conditions:-
a) The maximum value of such transfers
shall be Rs 5000/- per transaction.
b) Banks may place suitable cap on the
velocity of such transactions, subject to a
maximum value of Rs 25,000/- per
month, per customer.
c) The disbursal of funds at the agent/ATM
shall be permitted only after
identification of the recipient. In this
connection, attention of banks is drawn
to the provisions of the Notification
dated November 12, 2009, issued by
Government of India, under Prevention
of Money Laundering Act, 2002, as
amended from time to time.
d) Banks may carry out proper due
diligence of the persons before
appointing them as authorized agents for
such services.
e) Banks shall be responsible as principals
for all the acts of omission or
commission of their agents.
4. Mobile Payment (m-payment) Solutions
There are broadly three different
models available for m-payment solutions on
the basis of payment:
• Bank account/debit card based
• Credit card based
• Telecommunication company billing based
7. Bank Account/Debit based m-payment
In this model, the bank account/debit
card is linked to the mobile phone number of
the customer. When the customer makes an
m-payment transaction with a 5 MPFI -
Mobile Payment Forum of India merchant,
the amount from the bank account of the
customer is debited and the value is credited
to the merchant account.
8. Credit Card based M-Payment
In the credit card based model, the
credit card number is linked to the mobile
phone number of the customer. When the
customer makes an m-payment transaction
with a merchant, the credit card is charged
and the value is credited to the merchant
account. Credit card based solutions have the
limitation that it is heavily dependent on the
level of penetration of credit cards in the
country.
Applications of M-Commerce:-
Various applications of Mobile Commerce6
are given the below Table:-
Mobile
banking
Mobile Accounting
Mobile online stock
transaction
Mobile banking
information
Payment for insurance,
recharge coupons etc
Mobile
information
services
Current affairs
Tour and travel
information
Mobile search engines
and directories
Mobile
shopping
Purchase of goods and
services
Content purchase &
delivery
Mobile
ticketing
Sports and cultural
events
Cinema Tickets
Mobile
marketing
Mobile coupons
Mobile newsletters
Mobile
entertainment
Mobile Gaming
Download of music,
video and ring tones
Location based
entertainment services
For Mobile Commerce is an evolving
area of e-Commerce, where users can
interact with the service providers through a
mobile and wireless network, using mobile
devices for information retrieval and
transaction processing. M-Commerce
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services and applications can be adopted
through different wireless and mobile
networks, with the aid of several mobile
devices. However, constraints of both
mobile networks and devices influence their
operational performance; therefore, there is a
strong need for taking into consideration
those constraints in the design and
development phases of M-Commerce
services and applications. Another important
factor in designing M-Commerce services
and applications is the identification of
mobile users requirements. Furthermore, M-
Commerce services and applications need to
be classified based on the functionality they
provide to the mobile users. This kind of
classification results in two major classes:
the directory and the transaction-oriented
services and applications. This paper
suggests adoption, analysis and impact of M-
Commerce services and applications in
India. This approach relies on mobile user‘s
needs and requirements, the classification of
the M-Commerce services and applications,
as well as the current technologies and
wireless computing and their constraints.
Mobile Commerce is about the purchase and
sale of goods and services through the
mobile devices such as cell phone, laptop
etc. with the involvement of a financial
institution. Mobile Commerce includes the
following:
a) Travel and Ticketing
b) Movie Ticketing
c) Bill payments to utility and service
companies
d) Merchant & Retail Transactions
e) Money Transfer
Growth of Mobile Commerce:-
Mobile Commerce services are
evolving rapidly due to the coming together
of mobile service providers, banks and
payment service providers to offer more
products and secure transactions through
mobile networks. While e-Commerce is
limited to PC users only, Mobile Commerce
is open to almost everyone with a cell phone
and mobile connection. Mobile Commerce is
expected to grow because the mobile usage
and ownership penetration is more than 4 to
5 times than a PC and growing at a very fast
rate. With Mobile Commerce offerings
expanding, customers have the hand-held
convenience of using their mobile phones for
making payments for taxi fares and
recharging prepaid phone cards.
Emerging Services of Mobile Commerce:-
a) Increased mobile penetration and use of
GPRS on handsets has resulted in the
digital downloads market to cross
Rs.4.34 Billion by end of March 2012,
which will definitely increases in future.
b) Monetary transfers or transactions
through mobile phones are found to be
much cheaper than traditional bank
transfers as the transaction costs are
much lower in the former.
c) Innovative solutions for daily use such
as payment of auto or taxi fares
d) Inter-bank transfers services are also on
the anvil. ICICI Bank Ltd, India‘s
largest private bank, has already started
offering all its services through mobile
phones (called mobile banking) since
January 2012. Standard Chartered bank
has launched a service that enables
money transfer from any ATM to any
mobile phone across the country. The
recipient receives a pin number on his
or her mobile phone and the sender has
to convey the order number to the
recipient. Using these two the recipient
can withdraw money from the bank‘s
ATM‘s.
e) Feasibility studies are being
conducted to offer Mobile Commerce to
microfinance firms to enable them collect
payments from remote areas. The M-
Commerce/M-Banking services are run by
many Mobile banking application service
providers with their tie-ups with banks and
the telecom service providers. Different
technologies and types of applications are
available from them on the mobile platform;
each offering a matrix of advantages and
disadvantages, especially when the needs of
the disadvantaged segments are taken into
consideration. Some of the names of M-
Commerce platforms/services are mChek,
ngpay etc. From these platforms like m-
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
check, ngpay, require Java enabled handsets
& GPRS facility to operate M-Commerce,
while platform like PayMate does not
require these. Most of the M-Banking
transactions are between the bank accounts
of the customers. Some of the platform like
‗Green Money transfer‘ allows person to
person transfer through their bank accounts.
Bharat Sanchar Nigam Limited (BSNL) has
also plans to launch a mobile banking
platform with the help of Department of Post
wherein a mobile subscriber will be able to
send money orders electronically through
SMSs which will be in cashable at all post
offices in the country.
Conclusion
Mobile Commerce is an evolving
area of e-Commerce, where users can
interact with the service providers through a
mobile and wireless network, using mobile
devices for information retrieval and
transaction processing. M-Commerce
services and applications can be adopted
through different wireless and mobile
networks, with the aid of several mobile
devices. However, constraints of both
mobile networks and devices influence their
operational performance; therefore, there is a
strong need for taking into consideration
those constraints in the design and
development phases of M-Commerce
services and applications. Another important
factor in designing M-Commerce services
and applications is the identification of
mobile users requirements. Furthermore, M-
Commerce services and applications need to
be classified based on the functionality they
provide to the mobile users. This kind of
classification results in two major classes:
the directory and the transaction-oriented
services and applications. This paper
suggests adoption, analysis and impact of M-
Commerce services and applications in
India.
Reference
1. http://www.gvsu.edu/business/ijec/v8n3/
p007.html
2. Reserve Bank of India [www.rbi.org.in]
3. www.mpf.org.in
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RECENT TRENDS IN BANKING TECHNOLOGY
DR. PAWAR SUNIL DADARAM
Acting Principal,
Arts Commerce And Science College, Dehane,
Tal-Khed Dist-Pune, Maharashtra.
ABSTRACT
The Banking Industry the experienced a Series of Significant transformation in the
last few decades among the most important of them in the change in type of organization that
dominate the landscape. Today we are having a fairly well developed Banking system with
different Classes of banks-Public sector banks, Foreign banks, Regional rural banks, Co-
operative banks with the RBI as the Fountain head of the system there has been an
unprecedented growth and diversification of banking industry. The Banking industry is
undergoing paradigm shift in scope, context, Structure, Functions and governance. The
information and Communication technology revolution is radically changing the operational
environment of the banks.
Keywords - E-Banking, ATM, IT, Recent Trends in Banking.
Introduction:-
As the banking sector has been
silently innovating and with the advent of
technological development economic and
financial sector reform introduced in the area
of telecommunication and information
technology one such innovating in e –
banking. The Banking sector plays a very
significant role in economic development in
India. It is a central to a nation‘s economy as
it caters to the needs of credit for all the
Sections of the society. From the beginning
of 20th
century the Banking Sector grown
sizably. The British Government attention on
the need for organized banking sector in the
country and the set-up Reserve Bank of
India which is working as a central Bank of
India which is working as a central bank. It
is regulative authority of the Banking Sector.
Though Commercial banking of the western
type was developed during the British rule,
banking as such has not been unknown to
India from very ancient days indigenous
banking as different from the modern
western banking had been organized in the
Form of individual business.
This was due to planned economic
growth, increase in money supply, growth,
increase in money supply, Growth of
banking habit, control and guidance by the
RBI and above a nationalization of banks. In
1991 Govt. of India introduced a new
economic policy. Current banking sector has
come up with a lot of initiatives that oriented
to providing a better customer services with
the help of new technologies. Banking
sector mirrors the larger economy its
linkages to all sector make it proxy for what
is happening in the economy as a whole. In
the competitive banking word improvement
day by day in customer service is most
useful tool for their better growth bank
offers. So many changes to access their
banking and other services
Objective of study –
1. To study the opportunities the banks in
changing banking scenario
2. T
o study the recent trends in banking
3. To study the use of information
technology in banking
4. To explain the recent trade in changing
in banking scenario
Method Of study
This study is best on the analysis of
the banking scenario in India and the recent
trade and trades opportunities in the banking.
With the help of secondary data collection.
The secondary sources of data are banking
books, annual reports of RBI, Newspaper,
Magazine, Journals, Books, The Present
study is descriptive in nature .
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Recent Trends in banking
1. Automated Teller machine (ATM)-
ATM is the most popular device in India.
Which enables the customer to with draw
their money 24 hours a day 7 week
ATM are emerging as the most useful
tool unsure any theme banking and
anywhere banking or anytime money
ATM offers benefits to banks in the form
of extended hours services improved
customer service larger penetration, less
crowding at the bank counter cost
reduction.
2. Real Time Gross Settlement (RTGS)-
RTGS introduced in India Since March
4th
is system throw which electronics
instruction can be given by banks to
transfer fund from their accounts to off
another bank the RTGS system is
maintained and operated by the RBI and
provide a means of efficient faster funds
Transfer among banks facilities there a
financial operations as the name
suggested funds transfer between bank
take place on real time basis.
3. Tele Banking-The Tele banking service
allows the customer the interface throw
telephone customer can perform a
number of transactions from convenience
office own home or office facilities
offered by telebanking are information
on balance claque book requisition
money transfer, queries on services
4. Electronic Fund Transfer (EFT)-The
EFT automatically transfer money from
one account to another under EFT the
sender and receiver of funds may be
located indifferent cities and may even
bank with difference bank.
5. Electronics Clearing Service (ECS)-
ECS is the mode of payment of were by
an institution makes large number of
payment like interest divided salary
Pension large of numbers of Share
holders, employs etc. can make the
payment electronically ECS Scheme
helps utility instruction insurance
companies credit card and finance
companies to collect the proceed of
telephone bills insurance premier etc.
6. Internet Banking-Internet banking
unable customer to do banking
transaction through the banks website on
the internet under internet banking
services such as product information
application forms accounts balance
enquiry fund transfer etc. are provided
by the bank through the internet.
7. Mobile Banking-Everybody with a
mobile phone can access banking
services Irrespective of their location it
is an extension of internet banking if
provides services like account balance
mobile alert about credit card and debit
card , mini account statement etc.
Conclusion
Information technology plays vital
role in the world. Many changes have been
occurring in society with the IT. There are
several things discuses to consider. E
Banking is an umbrella system which is easy
to understand, easy to define comparative
study of Indian Banking sectors like as
public sector, private sector and other sectors
growing rapid is services because no need to
visit bank for each and every queries.
Customer get solution of its problem through
online bank, Mobile banks, internet bank and
other banking service channel.
Reference
1. A.S. Agrawal, ‗Indian Economy‘ New
age international Publication 2016.
2. www.indianresearchjournals.com
3. RBI Reports of trends and Progress of
Banking.
4. S.Natarajan, Dr.R.Parameshwaran,
‗Indian Banking, Chand Publication
2016.
5. RBI Annual Report 2012, 2013, 2014.
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TIME MANAGEMENT –IMPORTANT TIPS OF TIME MANAGEMENT
PRANITA P.SAHANE
College of ABM,
Gunjalwadi Pathar, Sangamner, Maharashtra.
GOVIND H.SONAWANE
College of ABM,
Gunjalwadi Pathar, Sangamner, Maharashtra.
Abstract
Time management is important for your personal life and career success. It teaches
you how to manage your time effectively and make the most of it. Time management is not
very difficult as a concept, but it‟s surprisingly hard to do in practice. It requires the
investment of a little time upfront to prioritise and organise yourself. But once done, you will
find that with minor tweaks, your day, and indeed your week and month, fall into place in an
orderly fashion, with time for everything you need to do. The highest achievers manage their
time exceptionally well. By using the time-management techniques in this section, you can
improve your ability to function more effectively – even when time is tight and pressures are
high.
Key Words: Time, Career, management, Organise.
Introduction It is a set of principles, practices, skills, tools and systems that help you use your time
to accomplish what you want. It is rightly said ―Time and Tide wait for none.‖ An individual
should understand the value of time for him to succeed in all aspects of life. People who
waste time are the ones who fail to create an identify of their own. Time management is the
process of organizing and planning how much time you spend on specific activities. Invest
some time in our comprehensive collection of time management articles to learn about
managing your own time more efficiently, and save yourself time in the future.
Time managements include
Effective Planning
Setting deadlines
Prioritizing activities as
per their importance
Time Management
Setting Goals and
Objectives
Spending the right time
on the right activity Delegation of responsibilities
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Importance of Time Management:
1. Time is a special resource that you cannot
store or save for later use. Everyone has the
exact same amount of time each day. Time
not well used cannot be retrieved.
2. Most people, feel like they have too much
to do and not enough time. They blame lack
of time for their poor finances, stress, bad
relationships, and for not exercising their
body.
Wise time management can help you find
the time for what you desire, and for what
you need to do.
3. You need time to get what you want out
of life. If you wait for extra time to appear,
you might lose the game of life. Through
right time management, you can ―create‖ the
time you need, and not just wait for it to
come. By planning your time wisely, you
will have more time to do more things.
4. Time management will help you set up
your priorities.
5. Time is limited to 24 hours a day, so plan
your life wisely.
6. Time management helps you make
conscious choices, so you can spend more of
your time doing things that are important
and valuable to you.
7. You can learn to find the time for the
things that are important to you. Even a
small amount of time once a day, or even
once a week, will take you closer to your
goals, and you will be surprised at the
progress you make.
8. You become more productive using
improved time management skills and tools,
and can accomplish more with less effort
and time. Time management can help you
reduce wasted time and energy, help you
become more creative and productive, and
enable you to do the right thing at the right
time. This will of course lead to more
balance and fulfilment in your life.
9. Life today presents so many distractions,
and therefore, it is very easy to lose time on
unimportant activities.
10. Life puts in front of everyone so many
choices each day, and the question is, do you
follow what appears on your way, or do you
consciously choose what you want to do?
11. A certain degree of detachment and
inner peace are useful in managing your
time effectively. They help you avoid
spending too much emotional and mental
energy on what people say and think about
you. They help you stay calm, despite
distractions or difficulties, and this saves
you a lot of time and energy, which you can
spend on better and more rewarding
activities.
Five Smart Tips for Time Management
1. Organize Your To-Do List:
Get your to-dos on paper. Keep a notepad or
note-taking application handy to jot down
everything you have to do as each occurs to
you. Then, organize your to-dos by type and
use a different paper or digital folder for
each such as ―follow up on‖ or ―people to
contact‖ or ―to read‖. Finally, schedule it.
Put each item on your calendar. Commit the
right amount of time on a specific day to
each task and you‘ll actually be able to
check them off. Just make sure you‘re not
making lists instead of tackling other
responsibilities.
2. Attack One Type of Action at a Time:
Flitting from making phone calls, to writing
proposals, to answering emails is less than
productive. Each type of action requires
your brain to switch gears, stop, then start
again on the new task. Try completing the
same types of tasks before moving to the
next. Make your phone calls, then answer
emails, then write proposals. You‘ll likely
save time and increase your productivity.
3. Eliminate Distractions:
You probably won‘t be able to eliminate all
interruptions. People still need your time
and attention through the day and you have
to respond to a crisis or unexpected need for
an immediate decision. But you can ―train‖
others to give you the time you need to get
your work done. Don‘t hesitate to block out
time not to be disturbed. Let your phone go
to voice mail. Turn off your email
notification and instant messaging. And
unless you need to be on social media for
your job, schedule a short block of time for
social networks – and stay off them
otherwise.
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4. Plan For – and Take – Breaks:
It‘s important to relax throughout your day.
You‘ll actually return recharged and more
productive. Why not let that block of social
media time become one of the day‘s
scheduled breaks? And be flexible: you
don‘t need to handle each new task as it
comes in. Save up several routine, non-
deadline-driven items to tackle all at once
and you‘ll have more time to accomplish the
big things.
5. Communicate:
It‘s easy to let communication slide when
you‘re focusing on time management. But
don‘t forget to check in with others. Get in
the habit of asking yourself if whatever
you‘re doing is the best use of your time. If
not – shift to something else. Start recording
your thoughts, conversations and activities
so you can get an idea of exactly how much
of your day you spend on each. Schedule
time to communicate with others on high-
priority tasks and projects.
Planning & Time Management
Being flexible is good, but skills in
planning and time management will help
you meet your goals. It doesn‘t matter if
they are big, long-term goals like working
overseas, starting a family or trade, or going
to university, or more modest, short-term
goals such as making time to watch your
favourite show on Sunday night, getting to
training more often, starting a painting or
book, or saving money for a new iPod.
Planning is a great tool for helping you meet
your goals.
Time Management Tips
Identify Your Goals And Priorities
Analyze How You Are Currently
Spending Your Time
Match How You Are Using Your Time
With Your Priorities
Develop A Plan That Is Manageable
Review And Change Your Plan If
Necessary
Build In Some Activities That Energise
You And Make You Feel Good
Expect That Unexpected Things Can
Occur
Use Schedules/Diaries/ Reminder
Systems That Work For You
Think Helpfully
The Difference between Urgent and
Important
‗Urgent‘ tasks demand your
immediate attention, but whether you
actually give them that attention may or may
not matter.
'Important' tasks matter and not
doing them may have serious consequences
for you or others.
For example:
Answering the phone is urgent. If you
don‘t do it, the caller will ring off, and
you won‘t know why they called. It may,
however, be an automated voice telling
you that you may be eligible for
compensation for having been mis-sold
insurance. That‘s not important.
Going to the dentist regularly is
important (or so we‘re told). If you
don‘t, you may get gum disease, or other
problems. But it‘s not urgent. If you
leave it too long, however, it may
become urgent, because you may get
toothache.
Picking your children up from school is
both urgent and important. If you are not
there at the right time, they will be
waiting in the playground or the
classroom, worrying about where you
are.
Reading funny emails or checking
Facebook is neither urgent nor
important. So why is it the first thing
that you do each day? See our
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page minimising distractions to help you
recognise and avoid other things that
may distract you from getting your
urgent and important tasks done.
This distinction between urgent and
important is the key to prioritising your time
and your workload, whether at work or at
home.
4 Ds of time management
1) Desire: An intense, burning desire to
control your time to achieve maximum
effectiveness.
2) Decision: a clear and firm decision that
you are going to practise good time
management till it becomes a habit.
3) Discipline: Discipline yourself to make
it a lifelong practice
4) Determination: Be willing to persist in
the midst of all the difficulties until you
become an effective time manager.
Reference
a. https://www.skillsyouneed.com/ps/time-
management.html
b. Planning and time management
c. 5 Smart Ways for Managers to Improve
Time Management
d. Importance of Time Management
by Remez Sasson
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CURRENT TRENDS IN STRESS MANAGEMENT
DR. B. A. SHELAR
K.K.W. College, Pimpalgaon(B),
Tal-Niphad, Nasik, Maharashtra.
Abstract
We‟ve been replacing the physical stressors of work with mental and emotional
stressors for many years. What‟s new is that we‟re hitting a resistance point. Many
people seem to be reaching a limit. In an increasingly friction-free economy, mental and
emotional health is the new wellness. Stress is a complex phenomenon. It has been defined
in many ways, but simply put; it is the wear and tear of everyday life. In every day‟s life
people are subjected to a wide range of pressures. Similarly there are also a wide range of
resources and strategies for coping with pressure. Sometimes people cope well and will not
feel that the pressure is having any adverse effect upon them. At other times they will have
difficulty in dealing with the situation and that is when we may use the term "stress".
Keyword- Stress Management, Depression, Polygraphs, Physical Manifestations, Meditation
Introduction
Stress management is a wide
spectrum of techniques
and psychotherapies aimed at controlling a
person's level of stress, especially chronic
stress, usually for the purpose of improving
everyday functioning. In this context, the
term 'stress' refers only to a stress with
significant negative consequences,
or distress in the terminology advocated
by Hans Selye, rather than what he
calls eustress, a stress whose consequences
are helpful or otherwise.
Stress produces numerous physical and
mental symptoms which vary according to
each individual's situational factors. These
can include physical health decline as well
as depression. The process of stress
management is named as one of the keys to
a happy and successful life in modern
society. Although life provides numerous
demands that can prove difficult to handle,
stress management provides a number of
ways to manage anxiety and maintain
overall well-being.Despite stress often being
thought of as a subjective experience, levels
of stress are readily measurable, using
various physiological tests, similar to those
used in polygraphs.
Ways to identify your stress:
1. Inability to Concentrate
2. Inability to Sleep
3. Inability to Relax
4. Physical Manifestations
Objectives of the study
1. To understand the concept of job stress
and its impact on employees.
2. To Know the factors influencing the job
stress of employees in the working
environment and correlation between
stressors.
3. To identify if there is any significance
difference between stress variable with
reference to gender category.
4. To identify measures to reduce stress, in
order to increase the skills of the
employees.
Why is it so important to manage stress?
If you‘re living with high levels of
stress, you‘re putting your entire well-being
at risk. Stress wreaks havoc on your
emotional equilibrium, as well as your
physical health. It narrows your ability to
think clearly, function effectively, and enjoy
life.
Effective stress management, on the other
hand, helps you break the hold stress has on
your life, so you can be happier, healthier,
and more productive. The ultimate goal is a
balanced life, with time for work,
relationships, relaxation, and fun—and the
resilience to hold up under pressure and
meet challenges head on. But stress
management is not one-size-fits-all. That‘s
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why it‘s important to experiment and find
out what works best for you. The following
stress management tips can help you do that.
Why Stress occurs?
When you perceive that demands
placed on you such as work, school or
relationships exceed your ability to cope.
Some stress can be beneficial at times,
producing a boost that provides the drive
and energy to help people get through
situations like exams or work deadlines.
However, an extreme amount of stress can
have health consequences, affecting the
immune, cardiovascular and neuroen
docrine and central nervous systems, and
take a severe emotional toll. Untreated
chronic stress can result in serious health
conditions including anxiety, insomnia,
muscle pain, high blood pressure and a
weakened immune system. Research shows
that stress can contribute to the development
of major illnesses, such as heart disease,
depression and obesity. But by finding
positive, healthy ways to manage stress as it
occurs, many of these negative health
consequences can be reduced. Everyone is
different, and so are the ways they choose to
manage their stress. Some people prefer
pursuing hobbies such as gardening, playing
music and creating art, while others find
relief in more solitary activities: meditation,
yoga and walking.
Techniques to reduce Stress
Take a break from the stressor- It
may seem difficult to get away from a big
work project, a crying baby or a growing
credit card bill. But when you give yourself
permission to step away from it, you let
yourself have time to do something else,
which can help you have a new perspective
or practice techniques to feel less
overwhelmed. It‘s important to not avoid
your stress, but even just 20-minutes to take
care of yourself is helpful.
Smile and laugh- Our brains are
interconnected with our emotions and facial
expressions. When people are stressed, they
often hold a lot of the stress in their face. So
laughs or smiles can help relieve some of
that tension and improve the situation.
Get social support- Call a friend,
send an email. When you share your
concerns or feelings with another person, it
does help relieve stress. But it‘s important
that the person whom you talk to is someone
whom you trust and whom you feel can
understand and validate you. If your family
is a stressor, for example, it may not
alleviate your stress if you share your works
woes with one of them.
Meditate- Meditation and mindful
prayer help the mind and body to relax and
focus. Mindfulness can help people see new
perspectives, develop self-compassion and
forgiveness. When practicing a form of
mindfulness, people can release emotions
that may have been causing the body
physical stress. Much like exercise, research
has shown that even meditating briefly can
reap immediate benefits.
Get enough sleep- Sleep is essential
for the body to function properly. Adults can
adopt helpful sleep-enhancing routines.
Music- Music can be used in many
situations to help reduce stress and create a
calming atmosphere: Use classical music to
concentrate as it is peaceful, harmonious and
doesn‘t have lyrics. Music can also be a
reminder to take breaks. When using music
to help you relax before sleep, choose
soothing music with monotonous repetition,
such as sounds of nature or ambient music
Manage your time optimally- Stress often results from difficulty in coping
with day-today problems and conflicting
responsibilities. A useful strategy for
dealing with a sense of being overwhelmed
by all the things that need attention is
prioritizing and diarizing. Create time
buffers to deal with unexpected emergencies
– this is a great way to prepare and avoid
excess stress.
If you are ill, rest Learn to say no- Where a no is the appropriate response, say
it without guilt. No also does not have to be
a decline, it can also be a negotiation
opportunity e.g. ― I can‘t do that now, but I
can do it in next week.
Talk to someone- We‘ve all heard
of the saying ―a problem shared is a problem
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halved‖ If you are troubled by something,
donot suppress it. Instead: Speak to a friend
or family member.
Other techniques
1. Exercise - Working out regularly is one of
the best ways to relax your body and mind.
Plus, exercise will improve your mood. But
you have to do it often for it to pay off.
So how much should you exercise every
week?
Good: At the very least, 3 to 5 times for 30
minutes
Better: 2 hours and 30 minutes of moderately
intense exercise like brisk walks
Best: Add 75 minutes of a vigorous exercise
like swimming laps, jogging, or other sports
that gets your heart rate up
2. Relax Your Muscles - When you‘re
stressed, your muscles get tense. You can help
loosen them up on your own and refresh your
body by Stretching, Enjoying a massage, Taking
a hot bath or shower, Getting a good
night‘s sleep.
3. Deep Breathing - Stopping and taking a
few deep breaths can take the pressure off you
right away. You‘ll be surprised how much
better you feel once you get good at it. Just
follow these 5 steps: Sit in a comfortable
position with your hands in your lap and
your feet on the floor. Or you can lie down.
Close your eyes. Imagine yourself in a relaxing
place. It can be on the beach, in a beautiful
field of grass, or anywhere that gives you a
peaceful feeling. Slowly take deep breaths in
and out. Do this for 5 to 10 minutes at a time.
4. Eat Well - Eating a regular, well-balanced
diet will help you feel better in general. It may
also help control your moods. Your meals
should be full of vegetables, fruit, whole
grains, and lean protein for energy. And don‘t
skip any. It‘s not good for you and can put you
in a bad mood, which can actually increase
your stress
5. Slow Down - Modern life is so busy, and
sometimes we just need to slow down and
chill out. Look at your life and find small
ways you can do that. For example. Set your
watch 5 to 10 minutes ahead. That way you‘ll
get places a little early and avoid the stress of
being late. When you‘re driving on the
highway, switch to the slow lane so you can
avoid road rage. Break down big jobs into
smaller ones. For example, don‘t try to answer
all 100 emails if you don‘t have to just answer
a few of them.
6. Take a Break – You need to plan on some
real downtime to give your mind time off
from stress. If you‘re a person who likes to set
goals, this may be hard for you at first. But
stick with it and you‘ll look forward to these
moments. Restful things you can do include:
Meditation,Yoga,Tai chi,Prayer,Listening to
your favourite music,Spending time in nature.
7. Make Time for Hobbies - You need to
set aside time for things you enjoy. Try to do
something every day that makes you feel
good, and it will help relieve your stress. It
doesn‘t have to be a ton of time -- even 15 to
20 minutes will do. Relaxing hobbies include
things like: Reading, Knitting, Doing an art
project, Playing golf, watching a movie,
Doing puzzles, Playing cards and board
games.
8. Talk About Your Problems - If things
are bothering you, talking about them can help
lower your stress. You can talk to family
members, friends, a trusted clergyman, your
doctor, or a therapist. And you can also talk to
yourself. It‘s called self-talk and we all do it.
But in order for self-talk to help reduce
stress you need to make sure it‘s positive and
not negative. So listen closely to what you‘re
thinking or saying when you‘re stressed out. If
you‘re giving yourself a negative message,
change it to a positive one. For example, don‘t
tell yourself ―I can‘t do this.‖ Tell yourself
instead: ―I can do this,‖ or ―I‘m doing the best
I can.‖
9. Go Easy On Yourself - Accept that you
can‘t do things perfectly no matter how hard
you try. You also can‘t control everything in
your life. So do yourself a favour and stop
thinking you can do so much. And don‘t
forget to keep up your sense of humor.
Laughter goes a long way towards making
you feel relaxed.
10. Eliminate Your Triggers - Figure out
what are the biggest causes of stress in your
life. Is it your job, your commute, your
schoolwork? If you‘re able to identify what
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they are, see if you‘re able to eliminate them
from your life, or at least reduce them. If you
can‘t identify the main causes of your stress,
try keeping a stress journal. Make note of
when you become most anxious and see if you
can determine a pattern, then find ways to
remove or lessen those triggers.
Conclusion
There is nothing more calming than
spending quality time with another human
being who makes you feel safe and
understood. In fact, face-to-face interaction
triggers a cascade of hormones that
counteracts the body‘s defensive ―fight-or-
flight‖ response. It‘s nature‘s natural stress
reliever as an added bonus, it also helps
stave off depression and anxiety. So make it
a point to connect regularly and in person
with family and friends. Keep in mind that
the people you talk to don‘t have to be able
to fix your stress. They simply need to be
good listeners. And try not to let worries
about looking weak or being a burden keep
you from opening up. The people who care
about you will be flattered by your trust. It
will only strengthen your bond.It‘s not
always realistic to have a pal close by to
lean on when you feel overwhelmed by
stress, but by building and maintaining
a network of close friends you can improve
your resiliency to life‘s stressors. Many
practical stress management techniques are
available, some for use by health
professionals and others, for self-help,
which may help an individual reduce their
levels of stress, provide positive feelings of
control over one's life and promote
general being. Evaluating the effectiveness
of various stress management techniques
can be difficult, as limited research currently
exists. Consequently, the amount and quality
of evidence for the various techniques varies
widely. Some are accepted as effective
treatments for use in psychotherapy, while
others with less evidence favouring them are
considered alternative therapies. Many
professional organizations exist to promote
and provide training in conventional or
alternative therapies. There are
several models of stress management, each
with distinctive explanations of mechanisms
for controlling stress. Much more research is
necessary to provide a better understanding
of which mechanisms actually operate and
are effective in practice.
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HUMAN RESOURCE ACCOUNTING
DR. ROHINI N.PACHORE
B.Y.K. College of Commerce,
Nasik, Maharashtra.
Abstract
Traditional financial accounting considers only the fixed assets and current assets as
assets and records this in the balance sheet of companies Annual reports, but the real asset,
that is, the human assets are not taken into consideration. This accounting of human asset is
done in human resource accounting. In developed countries, HRA is very well followed and is
attached in their Annual reports. Although, there is much research about HRA in developed
countries, there is a gap in the literature on this area in developing and fast developing
countries. The importance and value of human assets was recognized in the early 1990s when
there was a major increase in employment in firms in service, technology and other
knowledge based sectors. In these sectors, the intangible assets, especially human resource
contributed significantly to the building of shareholder value. The critical success factor for
any knowledge based company was its highly skilled and intellectual workforce. Soon after
the manufacturing industry also seemed to realize the importance of people and started
perceiving its employees as strategic assets.
Keywords: Human Resources Accounting, human capital, knowledge, intangible assets.
I. Introduction
To ensure growth and development
of any organisation, the efficiency of people
must be augmented in the right perspective.
Without human resources, the other
resources cannot be operationally effective.
The original health of the organization is
indicated by the human behaviour variables,
like group loyalty, skill, motivation and
capacity for effective interaction,
communication and decision making.
Men, materials, machines, money
and methods are the resources required for
an organization. These resources are broadly
classified into two categories, viz., animate
and inanimate (human and physical)
resources. Men, otherwise known as the
human resources, are considered to be
animate resources. Others, namely,
materials, machines, money and methods are
considered to be inanimate or physical
resources.
Resources are "all human, material,
real and monetary elements that can be
drawn and used in the production of
economic goods to satisfy social needs".
With the advent of the new economy,
knowledge-based economy it has been
concluded that human resources becomes
increasingly more important in determining
the total value of an organization.
Human resource Accounting (HRA)
involves accounting for expenditure related
to human asset in an organization as opposed
to traditional accounting which merely
expenses these costs and reduces profit
which to our mind sub optimises financial
reporting. As a result of this agitation and
the need for harmonization of human with
other resources in financial reporting, this
study was carried out.
Human capital refers to a set of
knowledge and competence, skills and
training, innovation and capabilities,
attitudes and skills, learning ability and
motivation of the people who form the
organization.
II. Definition of Human Resource
Accounting (HRA) :-
According to American Accounting
Association, HRA is ―the process of
identifying and measuring data about human
resources and communicating this
information to interested parties‖. HRA is
similar in principle to the financial
accounting, that is, just as financial
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accounting reflects the costs of assets such
as building and machinery, HRA shows
human resources as capital not as expenses.
According to Stephen Knauf, ―HRA is
the measurement and quantification of
human organizational inputs such as
recruiting, training, experience and
commitment‖.
Flamholz has defined HRA as
―accounting for people as an organizational
resource. It involves measuring the costs
incurred by an organization to recruit, select,
hire, train and develop the human assets‖
Bullen and Eyler (2010), state that
Human Resource Accounting involves
accounting for expenditure related to human
resources as assets as opposed to traditional
accounting which treats these costs as
expenditures that reduce profit.
Woodruff(1973) defined Human
Resources Accounting as the identification,
accumulation and dissemination of
information about Human Resources in
dollar or Naira term. He further explained
that Human Resources Accounting is the
systematic accumulation of information
about changes in investments made in
human resources and reporting back that
information to operating managers in order
to assist them to make better decisions than
they would have been able to make without
such additional information.
Raghav (2011), states that Human
Resources Accounting is a method of
measuring the effectiveness of personnel
management activities and the use of people
in an organization.
Thus, HRA shows the investment, the
organization makes in its people and how
their values change over a period of time.
HRA is a sophisticated way to measure the
effectiveness of personnel management
activities and the use of people in an
organization.
III. Objectives of Human Resource
Accounting (HRA):-
1. To identify the nature and importance of
human resource accounting.
2. To analyse the extent in which HRA
information help to make wise decisions.
3. To examine the perception of
management and employees on human
resource accounting.
4. Increasing managerial awareness of the
value of human resources.
IV. Human Resource Accounting suggests
the following information:
1. Information for Human Resource
Planning
a) To facilitate manpower planning
b) To gather data on actual costs of
recruitment and selection, training etc.
c) Collection of figures over the past period
provides reasonable basis for projecting
future expenses.
2. Information for control of personnel
costs
a) To provide reasonable means of
evaluating the performance of
management in controlling costs.
b) The information helps in developing a
system of standard costs for personnel
recruitment, selection and training. That
would help further in analyzing costs.
3. Information for control of turnover costs
a) To increase awareness to Management
about the costs of turnover and to devise
steps to control it.
4. Information for evaluation of
management effectiveness
a) To increase the accountability of
management in providing measurements
those are effective in developing and
utilizing people over a longer period of
time.
b) Cost per employee
c) Human Capital investment ratio
d) The amount of wealth created by each
employee
e) The ratio of salary paid to the total
revenue generated
f) Average salary of each employee
g) Employee absenteeism rates
h) Employee turnover rate and retention
rate.
5. Information for the Board and
Stakeholders
a) To keep the top management abreast of
changes in the company and its
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investment on people and human
resource value.
b) To help the top management in making
decision regarding the investment of the
firm in human resource to investors even
though the data remains unaudited.
V. Advantages of Human Resource
Accounting (HRA) :-
1. Information for manpower planning
HRA provides useful information about the
cost and value of human resources. It shows
the strengths and weakness of the human
resources. All this information helps the
managers in planning and making the right
decisions about human resources. Thus, it
provides useful information for Manpower
Planning and Decision Making.
2. Information for making personnel
policies
HRA provides useful information for
making suitable personnel policies about
promotion, favourable working environment,
job satisfaction of employees, etc.It can
assist the management for implementing best
methods of wages and salary administration.
3. Utilization of human resources
HRA helps the organisation to make the best
utilization of human resources. The system
of HRA discloses the value of human
resources, which helps in proper
interpretation of return on capital employed.
It helps in efficient utilization of human
resources and understanding the evil effects
of labour unrest on the quality of human
resources.
4. Proper placements
HRA helps the organisation to place the
right man in the right post depending on his
skills and abilities. The implementation of
human resource accounting clearly identifies
human resources as valuable assets, which
helps in preventing misuse of human
resources by the superiors as well as the
management.
5. Increases morale and motivation
HRA shows that the organisation cares about
the employees and their welfare. This
increases their morale and it motivates them
to work hard and achieve the objectives of
the organisation. Managerial decision-
making can be improved with the help of
HRA.This system can increase productivity
because the human talent, devotion, and
skills are considered valuable assets, which
can boost the morale of the employees.
6. Attracts best human resources
Only reputed organisations conduct HRA.
So, competent and capable people want to
join these organisations. Therefore, it attracts
the best employees and managers to the
organisation.
7. Designing training and development
programs
HRA helps the organisation to design (make)
a suitable training and development program
for its employees and managers.
8. Valuable information to investors
HRA provides valuable information to
present and future investors. They can use
this information to select the best company
for investing their money.
VI. Need for Human Resource Accounting
(HRA):-
The need for human asset valuation
arose as a result of growing concern for
human relations management in the industry.
Behavioural scientists concerned with
management of organizations pointed out the
following reasons for HRA:
1. Under conventional accounting, no
information is made available about the
human resources employed in an
organization, and without people the
financial and physical resources cannot be
operationally effective.
2. The expenses related to the human
organization are charged to current revenue
instead of being treated as investments, to be
amortized over a period of time, with the
result that magnitude of net income is
significantly distorted. This makes the
assessment of firm and inter-firm
comparison difficult.
3. The productivity and profitability of a
firm largely depends on the contribution of
human assets. Two firms having identical
physical assets and operating in the same
market may have different returns due to
differences in human assets. If the value of
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human assets is ignored, the total valuation
of the firm becomes difficult.
VII. Limitations of Human Resource
Accounting (HRA):-
1. The valuation of human assets is based on
the assumption that the employees are going
to remain with the organisation for a
specified period. However, this assumption
is wrong because employee mobility is very
high.
2. The human resource accounting may lead
to the dehumanization in the organisation. If
the valuation is not done correctly or the
results of the valuation are not used properly.
3. In the case of financial accounting, there
are certain specified accounting standards
which every organisation must follow.
However, there are no standards for
HRA.Each organisation has its own
standards for it. So, there are no uniform
standards for it. Therefore, the HRA of two
organisations cannot be compared.
4. There are no specific and clear cut
guidelines for 'cost' and 'value' of human
resources of an organisation. The present
valuation systems have many limitations.
5. The life of a human being is uncertain. So
its value is also uncertain.
6.There is no proper clear-cut and specific
procedure or guidelines for finding cost and
value of human resources of an organization.
The systems which are being adopted have
certain drawbacks.
VIII. Conclusion:-
It is fact that the 21st century is era
of Human demand, countries those have
labour quality ruling the world with
dominant technology. Thus, it could include
the measurement of sustained effort, of
corporate governance or human capital. The
nature of the financial ratio will change in
the future, as the importance of figures will
not be the only aspect to consider. No model
of human resources accounting is accepted
by the accounting bodies all over the world.
What is needed is measurement of abilities
of all employees in a company, at every
level, to produce value from their knowledge
and capability. Human Resource Accounting
(Human Resources Accounting) is basically
an information system that tells management
what changes are occurring over time to the
human resources of the business. Human
Resources Accounting also involves
accounting for investment in people and
their replacement costs, and also the
economic value of people in an organisation
References:-
1. Jain K.L Narang Accounting Kalyani
Publishers NewDelhi‖ pp.1235.
2. Subbarao, A.V., &Zehgal, D.(1997).
Human resources information and
disclosure inannual reports : An
international comparison. Journal of
Human Resource Costing
andAccounting, 2 (2), 53-73.
3. Sen, Dilip Kumar. "Anatomy of Human
ResourceMeasurement and Accounting",
Ph.D. Thesis,Bangla Academy, 2005.
4. Parameswaran R. &Jothi K. "Human
ResourceAccounting –The Charted
Accounted, Jan. 205. pp867-69.
5. Akhtaruddin,M., "Human Resource
Accounting InBanking Industry", The
Cost and Management,Sep.-Oct. 1990,
pp. 19-22.
6. Caplan E. H. and Landekich, S., ―Human
Resource Accounting: Past, Present and
Future‖.
7. Personnel / Human Resource
Management (Text, Cases and Games):
P. Subbarao& V.S.P. Rao.
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STUDY OF IMPACT OF GOODS AND SERVICES TAX
ON SERVICE INDUSTRY
(HOTEL, EDUCATION, HEALTH)
DR. D. P. GADHE
Associate Professor,
S.S.G.M. College, Kopargaon.
Dist-Ahmednagar, State-Maharashtra
A. ABSTRACT
GST is one of the most crucial tax reforms in India. It is a comprehensive tax system
that will subsume all indirect taxes of states and central governments and united economy
into a seamless national market. It is expected to iron out wrinkles of existing indirect tax
system and play a vital role in growth of India. This paper presents an overview of GST
concept, explains its impact on service sector industry/institution.
Keywords:- Goods and Service Tax, Service sector industry/Institution.
B. The Study has the following
objectives:-
1)To Know the Concept of Service.
2)To study the impact of GST on Service
Sector related to Hotel,Health,Education
C. Hypothesis of the study:-
1. Goods & Service tax made a positive
impact on service
sector(Hotel,Education,Health)
2. Goods and service tax beneficial to
consumer & Producer of related service
industry.
D. Definition & Meaning of Service:-
According to Business Dictionary
Service Defined as:-
Intangible products such as
accounting, banking, cleaning, consultancy,
education, insurance, expertise, medical
treatment, or transportation. Sometimes
services are difficult to identify because
they are closely associated with a good;
such as the combination of a diagnosis with
the administration of a medicine. No
transfer of possession or ownership takes
place when services are sold, and they (1)
cannot be stored or transported, (2) are
instantly perishable, and (3) come into
existence at the time they are bought and
consumed.
E. Impact of GST on Service Sector:-
This study is related to service
sector subject to Hotel industry, Health
Service,& Education Institution. Hence We
Discussed on following industry/Institution.
1.Hotel Industry-
Hotel industry is basically served
two types of services namely restaurant and
accommodation/Hospitality service, hence
let we observe what is happened with these
two services by the effect of GST.
Hotel industry Goods and Services
Tax, or GST This seems to be the word
everyone is treating with complete
trepidation. There is still a lot of uncertainty
and wariness in what the next few months
will bring, and what all changes need to be
made.So how does GST affect the Indian
hospitality sector? Just a few days back, the
GST council provided a slight sigh of relief
to mid- market and luxury hotels by stating
that only rooms with a tariff of Rs.7,500
and more, and not Rs.5,000 as declared
earlier, would have a GST of 28%. Hotel
rooms with a tariff between Rs. 2,500 to Rs.
7,500 would have a GST of 18%.
-Following Chart provide the price Charged
after GST
Room Tarriff
(INR)
GST
Applicable
Less than 1000 0%
1000-2499 12%
2500-7499 18%
More than 7500 28%
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b) Restaurant Service/other service:-
Serving of Food and Liquor in Restaurants
and in Room Dinning
1. Supply of Food/drinks in
restaurant not having
facility of air-
conditioning or central
heating at any time during
the year
and not having licence to
serve liquor.
12% with
ITC Credit.
2. Supply of Food/drinks in
restaurant having licence
to serve liquor.
18% with
ITC Credit
3. Supply of Food/drinks in
restaurant having facility
of air-conditioning or
central heating at any
time during the year.
18% with
ITC Credit
4. Supply of Food in
catering service
18% with
ITC
Credit< /p>
5 Supply of Food/drinks in
air-conditioned restaurant
in 5-star or above rated
Hotel
18% with
ITC Credit
Rent a Cab
6. Rent a cab (If fuel cost is
borne by the service
provider)
5% with
No ITC.
7 Rent a cab (If fuel cost is
borne by the service
recipient)
18% with
ITC Credit
Mandapkeeper
8.
Bundled service by way
of supply of food or any
other article of human
consumption or any
drink, in a premise
(including hotel,
convention center, club,
pandal, shamiana or any
18% with
ITC Credit.
other place, specially
arranged for organizing a
function) together with
renting of such premises.
Banking and financial services like foreign
currency exchange
9 In case of currency
exchange to its guest
Value of Currency
Involved (in INR)
18% with
ITC Credit,
but
valuation
shall be
done as per
valuation
rules
10. 0 to 1,00,000/- 1% or Rs.
250/-
whichever
is higher.
11 1,00,001/- to 10,00,000/- 1,000/-+
0.5%
12 10,00,00/- and above 5,000/-
+0.10% or
Rs.
60,000/-
whichever
is lower.
Supply of packed food items as mini bar.
13 Supply of packed food in
mini bar
Rate shall
be as per
product
rate.
Renting out the premises for events,
conferences etc
14 Renting out the premises
for events, conferences
18% with
ITC Credit.
Other Services
15 Catering Services 18% with
ITC Credit
16 Laundry services 18% with
ITC Credit
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17 Business support services 18% with
ITC Credit
18 Telecommunication
services like telephone,
fax, wifi.
18% with
ITC Credit
19 Beauty parlor 18% with
ITC Credit
20 Gymnasium services 18% with
ITC Credit
21 Club Facility. 18% with
ITC Credit
2. Education Sector:-
The Right of Children to Free and
Compulsory Education Act of 2009 has
made education not only compulsory but
has also made the Govt. responsible to
provide education at economical rates. The
Council has kept education sector free
from its ambit.
Services related to education, provided by
any educational institution to its students,
faculty and staff like transportation,
catering, mid day meals, admissions,
examinations, housekeeping etc. have been
exempted under GST. The educational
institutions that have been granted the
exemption from GST are pre-schools and
higher secondary educational institutes both
private and Govt.
The exemption has also been
granted to the services provided by the
Indian Institutes of Management to their
students, by way of the –
1. 2 year full-time residential PG programs
in Management for Post Graduate Diploma
in Management, admission in which is
granted via CAT
2. Fellowship programs in Management
3. 5 Year Integrated Programs in
management studies (but excludes the
Executive Development Program).
The education services provided by the
below are also exempted from GST:
1. National Skill Development Corporation
set up by the Government of India
2. Sector Skill Councils approved by the
National Skill Development Corporation
3. Assessment agencies approved by the
Sector Skill Council or the National Skill
Development Corporation
4. Training partners approved by the
National Skill Development Corporation or
the Sector Skill Council are also included
w.r.t the following programs:
(a) the National Skill Development
Programme implemented by the National
Skill Development Corporation
(b) a vocational skill development course
under the National Skill Certification and
Monetary Reward Scheme
(c) any other Scheme implemented by the
National Skill Development Corporation‖.
However, as the educational services led by
training and coaching foundations don‘t
help in getting legally perceived
qualifications therefore these are not
exempted from GST. Let us take a look at
them:
1. Higher Education Institutions and Private
Institutions - The exemption under GST has
been granted just for pre-schools till higher
secondary education and since universities
and other advanced educational institutions
have not been mentioned in the exception
list, and thus GST of 18% is expected to be
levied on this.Higher education in the
private segment will end up being more
costly and in turn, rivalry for admissions in
government schools/colleges/foundations
will increment. There will be a 3 to 5% of
the obligation jump on the cost of
administrations that will over the long haul
impact the common man. The burden will
be the most on middle class families who
obtain education loans or put their life-long
savings into educating their wards at
reputed institutions.
2. Coaching Institutes - Coaching
institutes form an integral part of education
today as clearing competitive exams and
entrance exams seems just impossible
without taking professional coaching on
how to clear and attempt them. GST has
raised the rate of taxes to 18% from 14%
for these coaching institutes. This will be a
burden for all parents whose child is about
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to start coaching for IITs and other
competitive examinations.
3. Cost of Organizing Events – Any
educational/training events organized in
India by foreign entities which are attended
by professionals, individuals and overseas
participants as well would be taxed under
GST.
3. Healthcare Sector: Health care is one of the fastest
growing sectors of the Indian economy with
lots of potential in terms of revenue and
employment. Health care is a wider term
that mainly includes pharmacy, medical
devices, medical insurance, diagnostics and
other components of medical care. The
GST is going to affect all the components
of health care in various ways.
1) GST and Pharmaceutical industry -
About two thirds of the out of pocket
expenditure on healthcare is on drugs in
India. The burden of all the taxes on drugs
in general was about 13 percent in the pre
GST period and the current GST is 12
percent as a whole including ayurvedic
drugs. The medicines for HIV-AIDS,
malaria, tuberculosis and diabetes will be
imposed 5 percent GST. The GST on the
drugs produced under excise free
manufacturing zone is yet to be clarified.
The best thing for the pharma companies is
that their cost of purchase is going to
reduce. Moreover the burden of multiple
tax and complexities associated with
multiple tax system slowed down the
business. GST will give hassle free business
environment to the pharma companies. For
the consumer the cost of drugs will come
down.
2) GST and Medical devices and
Equipment - The manufacturers of medical
devices are also joining the party as medical
devices and surgical equipments are
proposed to be taxed 12 percent under the
GST. The previous burden of taxes on the
medical devices and equipment was over 13
percent including all the bunch of taxes. So
one percent tax benefit is clearly visible
under the new tax system for the medical
device and equipment industry. This will
clearly give a boost to the industry in the
near future. The consumer will also share
the benefits in terms of lower price and
affordability.
3) GST and Health Insurance - There is lot
of scope of for health insurance in the
country like India where the coverage under
health insurance is only 18 percentage in
urban and 14 percent in rural India in 2016.
The GST rate on the insurance sector is 18
percent as against 15 percent service tax in
the pre GST era. It clearly indicates that the
health insurance premiums are going to
increase.
4) GST and diagnostics - There is expected
rise in the prices of diagnostics such as
blood tests, X-rays, MRI and strip based
diagnostics as they are put under either 12
or 18 percent slab which is higher than the
previous tax rate on these services. In the
pre GST era the 10-15 percent of out of
pocket expenditure is on diagnostics which
is expected to increase in the post GST
period.GST will certainly increase the
Government revenue in the country with
more transparency in the tax system that
will further simplify the tax structure. The
economy is expected to grow at a faster
rate. Every sector of the economy would
have its share in the growth of the economy
including healthcare sector. In a broad
spectrum, it is an analysing phase for the
healthcare sector to see the impact of GST.
The experts of the healthcare sector are
confident that the post GST period will
bring the strategic change and will create a
positive environment by minimizing the
obstacles and complexities in the growth of
healthcare sector and have a positive impact
to bring down the cost of health.
F. Conclusion
We can conclude from the above
study that the Goods & Service Tax (GST)
is much beneficial to the both customer and
the service industry because of its
uniformity of charging taxes. When we
come through study of above stated service
industry, we can test our hypothesis on the
basis of analytical study,
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1. Goods & Service tax made a positive
impact on service
sector(Hotel,Education,Health)
2. Goods and service tax beneficial to
consumer & Producer of related service
industry.
Both hypothesis are accepted.
References
1) http://edupaper.in/gst-india-advantages-
disadvantages/#sthash.f6tap0Dw.dpuf
2) https://www.google.co.in
3) http://www.gstindia.com/
4) http://www.moneycontrol.com/news/tax
/why-is-gs
5) http://www.business-
standard.com/article/economy-
policy/administratively-we-areready-
for-gst-rollout-from-april-1-2016-
shaktikanta-das-115081800008_1.html
6) http://tejas.iimb.ac.in/interviews/27.php
7) https://cleartax.in/s/gst-council/
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A STUDY OF PREVIOUS TAX STRUCTURE AND GOODS AND SERVICE TAX
DR. VAISHALI M. DESHPANDE
Maharshi Karve Stree Shikshan Samstha‘s
Shree Siddhivinayak Mahila Mahavidyalay,
Karvenagar, Pune, Maharashtra.
INTRODUCTION:
An individual who is eager to know
what is the difference between Goods and
Service Tax and Previous
taxation system and Goods and Service Tax
is a boon to the Indian economy. GST India
is a comprehensive tax on manufacturing,
sale and consumption of goods and services
at national level, under, which no distinction
will be made between, goods and services
for levying of tax. GST India has subsumed
almost every indirect tax, levied on goods
and services by the Central and State
governments in India. GST has a G2B portal
for taxpayers, to access the GST System,
seeking to file their GST returns. However
that would not be the only way, for
interacting with the GST India Services, as
the taxpayer, pertaining to his preference of
third party applications.
Objective of the study:
1. To review the previous tax structure.
2. To understand the new concept of
GST.
3. To know GST structure.
4. To compare previous tax and GST.
Methodology:
This paper is purely based on
secondary data.
Previous Tax Structure in India:
Central Taxes: * Central Excise
*Additional Duties of
Custom
* Service Tax
*SAD
* All Cesses
State Taxes: VAT / Sales Tax
Entertainment Tax
Luxury Tax, Lottery Tax
Entry tax
Purchase tax
Stamp duty
Electricity duty
Tax on Vehicle
All the above mentioned indirect
taxes have been subsumed to bring about a
new tax reform – Goods and Services Tax
(GST). Whether you are a Buyer or supplier.
MAJOR INDIRECT TAXES AT
PRESENT:
1. EXCISE DUTY:
2. SERVICE TAX
3. VAT/ CST
1. EXCISE DUTY: Central Excise duty is
an indirect tax levied on goods
manufactured in India. Central Excise
revenue is the biggest single source of
revenue for the Government of India. The
Central Excise duty is levied in terms of
Central Excise Act, 1944.Manufacture has
to take registration when turnover exceeds
90 crores. Goods shall be removed under
invoice format proscribed in excise rules.
Appropriate duty has been charged on
invoice and should be paid to central
government within time limit. Records have
been to maintain like Daily Stock Account,
CENVAT Credit on Inputs/ Input Services /
Capital Goods. Periodic Returns as
applicable should be submitted within due
dates.
2. SERVICE TAX: Service Tax is an
indirect tax levied on rendering of services
in India. This tax is introduced by Finance
Act, 1994, by Dr. Manmohan Singh. At
present almost 120 category of taxable
service are there in India. Generally service
provider is liable to pay service tax but
government has notified certain services
with regard to which service receiver would
be held liable to pay service tax (Reverse
Charge Concept). Service tax levied by
Central Government. Service Provider has to
take registration when service turnover
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exceeds Rs. 9 lakhs. Services shall be
provided by issuing authenticated invoice
format prescribed in rules. Six monthly
returns should be submitted within due
dates.
3. VALUE ADDED TAD (VAT) /
CENTRAL SALES TAX (CST):VAT/
CST is also indirect tax levied on sale of
goods. It is the source of revenue to the State
Government. It is a multi-stage tax levied at
each stage of the value addition chain. VAT
is levied on Intra-State Sale Transactions
(within same state).CST is levied on Inter-
State Sale Transactions (one state to another
state). VAT Law is defined by States (in
Maharashtra –MVAT Act, 2002) and Rules
made there under. CST law – Central Sales
Tax Act, 1956.
LIMITATION OF CURRENT
INDIRECT TAXES:
1. Tax Cascading.
2. Lack of Uniformity in Provisions and
Rates.
3. Complexities in Administration.
4. Multiple Acts and Compliances-Returns.
5. Different Valuation basis.
6. Different Adjudications.
7. Complexity in defining the nature of
transaction –Sale vs. Service.
8. Ambiguity under service Tax and VAT –
Restaurant Services / Works Contract
/Right to use of Movable goods /
Software.
9. Ambiguity under Excise and Service tax
for – Drawings and Designs / Software /
Commissioning and Installation.
GOODS AND SERVICE TAX:
GST is an Indirect Tax which was
introduced in India on 1st July, 2017 and was
applicable throughout India which replaced
multiple cascading taxes levied by the
Central and State Government. The GST is
governed by a GST Council and its
Chairman is the Finance Minister of India.
GST is an Indirect tax levied on the supply
of goods and services. GST Law has
replaced many Indirect tax law that
previously existed in India.
NEED OF GST:
1. Simplified and Unified Tax System.
Abolition of multiple types of Indirect
Tax.
2. Avoid double taxation. Ease of Doing
Business.
3. Reduce Interface with different
departments – Central, State and Local
bodies.
4. Simple collection system.
5. Introduction of GST will reduce the
prices of goods and thereby enhance the
ability of companies to compete
globally.
6. Development of common national
market.
7. Fewer rates and exemptions.
8. Uniform prices throughout the country.
9. Transparency in taxation system.
10. Increase in employment opportunities.
11. Reduces administrative cost for the
Government.
OBJECT OF THE GST:
Its main objective is to consolidate
all indirect taxes levied on goods and
services. Introduction of GST will reduce
the prices of goods and thereby enhance the
ability of companies to compete globally.
GST removes cascading effect of taxation
and also distortion in the economy. For
overcome the limitations of existing indirect
tax structure, and creating efficiencies in tax
administration. It is expected that due to
GST, India‘s GDP will grow by 1-2% and
India‘s rank in Ease of Doing Business is
expected to improve by fifty number.
PROPOSED INDIRECT TAX STRUCTURE IN GST:
INDIRECT TAXC (GST) = INTRA-STATE (CGST) AND (SGST) + INTER STATE (IGST
– DUAL)
CGST – CENTRAL GOODS AND SERVICE TAX
SGST – STATE GOODS AND SERVICES TAX
IGST – INTEGRATED GOODS AND SERVICE TAX
In most cases, tax structure under the new regime will be as follows:
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Transaction New Regime Old Regime
Sale within the
State
CGST + SGST VAT + Central
Excise / Service
Tax
Revenue will be shared equally
between the Centre and state
Sale to another
state
IGST Central Sales
Tax + Excise /
Service Tax
There will be only one type of
tax (Central) in case of
interstate sales. The center will
then share the IGST revenue
based on the destination of
goods.
Difference between current taxation system and GST
Previous taxation system and GST System
Condition Previous Taxation System GST System
Tax Structure
Structure 1. Under separate laws, tax is
levied by Central Govt. and
State Govt. on goods and
services.
2. In the Current taxation system
import of goods into India is
subject to a levy of customs
duty and the person importing
the goods is liable to pay
customs duty at the applicable
rates.
1. There is no separate tax
levied for goods and
services. GST is a
common tax applicable
to both of these.
2. In the GST System till
the goods or services
reaches the consumer
this GST tax would
allow smooth and
continuous tax credit at
all levels
Place of
Taxation
Origin based taxation Destination based Taxation
Types of Taxes
Excise duty A percentage levied on manufacture,
sale, or use of locally produced
goods.
Excise Duty will be
subsumed in GST and
levied as CGST and SGST
Service Tax Tax levied by the government on
service providers on certain service
Tax will be subsumed in
GST and levied as CGST,
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transactions, but it‘s actually borne
by the customers.
SGST and IGST.
State VAT VAT (Value Added Tax) is a form
of indirect tax imposed only on
goods sold within a particular state.
Here in GST, it is subjected
to CGST And SGST if
the supply of goods is
within the state.
Central sales
Tax
It is a form of indirect tax imposed
only on goods sold from one state to
another state.
It is a form of indirect tax
imposed only on goods sold
from one state to another
state.
Threshold limit
1. Central Excise-1.5 Crores
2. VAT-Varies from Rs.5to 20
Lakhs from state to state
3. Service Tax- Rs.10 Lakhs
CGST & SGST– Rs.10
Lakhs to 20 Lakhs as
recommended by GST
Council.
Cascading effect
This Problem arises because credit
of CST and many other taxes are not
allowed
In the introduction
of IGST this situation will
not arise as CST concept.
Broad scheme Separate laws for charging separate
taxes One law for various taxes
Tax rates Different tax rates for different
taxes.
There will be
one CGST rate and a
uniform SGST Rate across
all states.
Tax burden Tax burden is high for the individual
to pay so many taxes.
Tax burden is low because
of single tax so the work
splits between
the manufacturing and
service sector.
Compliance Tax compliance is complex due to
multiplicity of tax.
Tax compliance is easier
because of one law.
CONCLUSION:
Previous tax policy was complicated.
Goods and Service Tax has single
administration. One assess will be
administered either by state government or
central government. Around 36 Returns are
required to be filed in a year. Taxable event
in GST is supply. Anti-Profiteering Measure
clause inserted in GST law so as to ensure
that consumer gets benefits of price
reduction in GST due to reduction in taxes.
In simple words, GST is an indirect
tax levied on the supply of goods and
services. GST Law has replaced much
indirect tax law that previously exist.
References:
1) www.greengst.com/difference-between-
current-tax-structure-and-gst/
2) ww.ndtv.com/business/before-and-after-
gst-here-are-tax-rates-on-some-common-
use-items-17
3) www.ndtv.com/business/before-and-
after-gst-here-are-tax-rates-on-some-
common-use-items-17358
4) www.quora.com/What-is-the-difference-
between-old-tax-and-current-GST
5) www.reachaccountant.com/erp-software-
pos-software-blog/difference-current-
taxation-new-goods
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EFFECT OF GST ON INSURANCE
DR. RATI CHANDRA
Pashan, Pune, Maharashtra.
“Nothing is constant but Change” and this time it is the long awaited change
in the indirect tax plan known as Goods and service tax. Health insurance has become
3% more expensive with the implementation of GST. This research paper is an
attempt to understand the effect of increase in GST indirect tax on the insurance
premium and on the growth of Indian insurance sector as whole.
Understanding GST in one glance: -
The Goods and Service Tax Act
popularly known as GST was passed
in the Parliament in the month of May 2017
.The tax came in to effect from 1stday of
July 2017 to bring changes in the tax
structure between center government and
State government . It is a
comprehensive, multi-stage, destination-
based value added tax imposed with the
intention of eradicating cascading of taxes.
But there was no cascading of taxes in
Insurance!! Then why Insurance holder
have to pay more premium? Its like When
the buffaloes fight, the crops suffer.
The insured have to shell out 3%
more post the implementation of GST the
taxes have increased from 15% to 18% on
the insurance premiums.
The Premium Deciding Factor
The premium is decided on the type
of insurance one like to buy to prevent the
risk of financial loss against the events like
death, disease, fire or theft. Indian
Insurance sector is broadly divided in to (a)
Life insurance and (b) General insurance.
Effect of GST on Life Insurance and
Health Insurance.
There are of 3 types
1. Term insurance plans — The most basic
form of life Insurance.
2. ULIPs — Unit link investment Plan
offers the combination of investment
and insurance in one plan.
3. Endowments or money back plan —
Insurance plan that pay a lump sum
amount on maturity or on the event of
death or a regular payment of fixed sum
every month (like a pension)
Service tax applicable before and
after GST
Category Service Tax
With SBC*
And KKC*
After
GST
Term insurance
premium
15% 18%
ULIP charges 15% 18%
Health insurance
premium
15% 18%
*SBC Swatch bharat cess KKC Krishi
kalyan cess
The application of taxes in details: -
1. The amount allocated for Investment (on
behalf of Insurer) is deducted from the
gross premium and tax is levied only on the
amount allocated purely for insurance
premium.
For example,
Gross Premium 1000 1000
Investment Portion 600 600
Life Insurance portion 400 400
Service tax @ 15% on
400
60 —–
GST @18% on 400 —– 72
(Gupta, 2017)
2. Single premium annuity policies- 10% of
the premium
3. Rest all cases- 25% for 1st year and 2nd
year onwards 12.5%on the premium paid
Gross Premium p.a. 1000
1st Year
25% of value 250
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GST @18% on 250 62.50
2nd year
12.5% of value 125
GST @18% on 125 22.50
Impact:
For Insured, the premium of existing
policies as well as new policies will
increase 3% due to the increase in tax rates.
For insurers, as GST is an indirect tax the
burden will be passed on to the consumers.
The insurance company expect higher
compliance and administrative costs due to
the complexities of GST returns and also
effect of taxability of inter-branch services.
GST is not applicable on government
insurance scheme like
Janashree Bima Yojana (JBY); or
Aam Aadmi Bima Yojana (AABY);
Life micro-insurance product as approved
by IRDA ,
Varishtha Pension BimaYojana;
Pradhan Mantri Jeevan Jyoti BimaYojana;
Pradhan Mantri Jan Dhan Yogana;
Pradhan Mantri Vaya Vandan Yojana
Life insurance provided by the Central
Government to members of the Army, Navy
and Air Force.
(India.gov.in, 2017)
Effect of GST On General Insurance.
General insurance includes fire
insurance, marine insurance, car insurance,
theft insurance, etc. The same rate of 18%
GST is imposed on Health insurance
premiums.
Impact:
For individual insured, the gross
premium will increased with 3%
For Corporate policyholders, who
have taken general insurance through their
company will have the benefit of input tax
credit on the GST paid on their policies
though this was available to them
previously also under service tax.
Insurance
Product
Befor
e
Afte
r
Applicabilit
y
Term
Insurance
Premium
15 18 On the entire
premium
amount
ULIP 15 18 On the
premium
amount minus the
investment
amount
Health
Insurance
Premium
15 18 On the entire
premium
amount
Add-on
Riders
Premium
15 18 On the entire
premium
amount
Periodicity
- Single
Premium
15 18 On 10
percent of
the total premium. It
means that
the previous 1.5 percent
of the total
premium would be
hiked to 1.8
percent of
the total premium as
per the
updated GST rates.
Endowmen
t Plan Premium
(First
Year)
15 18 On 3.75
percent of the total
premium
Endowmen
t Plan
Premium (Renewal)
15 18 On 1.875
percent of
the total premium
Source:- (Dhawan, 2017)
Summary
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The GST has definitely widened the
hole in the pocket of insurance holders.
This hike will have a negative impact on the
growth of insurance sector. According to
the IRDA reports 2016 life insurance reach
in India has reduced from 4.6% to 2.6%
(IRDA, 2017)and the increment of taxes
will bring the affordability of common men
further down. The only ray of hope is the
government Insurance schemes and now all
the energies should focus on increasing the
penetration of Government run insurance
scheme to support the lowest cadre of
Indian population.
Reference
1. Dhawan, s. (2017, june 22). GST impact
: Insurance premium,banking service
charges to increase. Retrieved november 27,
2017, from economictimes.indiatimes.com:
https://economictimes.indiatimes.com/wealt
h/personal-finance-news/gst-impact-
insurance-premium-bank-charges-to-
increase/articleshow/58895024.cms
2. IRDA. (2017). IRDA annual report.
Government, Insurance. IRDA.
3. Gupta, A. (2017, june 5). How GST will
increase insurance premium, bank charges.
(Financial express) Retrieved November 27,
2017, from Financial Express read to lead:
http://www.financialexpress.com/money/ho
w-gst-will-increase-insurance-premium-
bank-charges/702258/
4. India.gov.in. (2017). India .gov.in.
Retrieved november 27, 2017, from
www.india.gov.in:
https://www.india.gov.in/list-government-
sponsored-socially-oriented-insurance-
schemes
5. Chandra, D. R. (2017, April 25). A
comparative study of health insurance
policies among life, non-life and specialised
health insurance companies. Pune,
Maharashtra.
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THE IMPACT OF E COMMERCE IN DEVELOPING COUNTRIES
AND NEW EMERGING BRAND EXTENSION
SUROJIT SAHA
ASM
Group Branding Head
DEEPAK SINGH PARMAR Senior Executive
Digital Marketing TCS
Abstract The Impact of E-commerce has been seen by many as an opportunity for developing
countries to gain a stronger foothold in the multilateral trading system. E-commerce can play
a pragmatic role in helping developing economies benefit more from trade. Unlike the
requirements necessary to run a business from a physical building, e-commerce does not
require storage space, insurance, or infrastructure investment on the part of the retailer.
However, there are many obstacles in developing countries which seriously hinder the
growth of their ecommerce.
Index Terms
E-commerce, Economic development electronic business, electronic commerce,
developing countries developing economies, social development.
Introduction: In today‘s modern era of high
technological innovation and scientific
consumer research, never has it been in the
history of mankind that today internet has
connected both the urban and rural
economy. A new kind of energy and
enthusiasm has been found creating better
markets, boosting economies, improving
the quality and standard of life both in city
and remote villages. Even ten years before
nobody could think and anticipate the
structural and sociological transformation
that could possibly be done.
From a slow pace economy to a
full throttle growth in economy in
particular in developing countries like
ours, the data plays a fundamental role in
positively impacting E commerce which as
per market analyst is the next big trillion
dollar revolution. The key catalyst to
enhance this positive growth has been
brought by the power, the agility of
connecting the seller, marketer and the
consumer at an extreme end. Based on
detail market research it has been reported
that there were four major revolutions that
took place in the 21st century.
1. Automobile Revolution
2. Hardware Revolution
3. Software Revolution
4. E-Commerce Revolution
No doubt the way today a
consumer who used to wait helplessly for
receiving qualitative and value add worth
the price they used to pay for the product,
today most of the supply and
manufacturing companies goes all possible
ways to delight their customers. E-
commerce impact has brought a paradigm
shift from giving seller importance to re
focus more on the consumer experience.
Not only internet explosion has reduced
the gap of transaction but also has given
the customer a wide range of rational
possibilities and options to choose from
the worst to the best.
History of E-Commerce:
Background E-commerce actually began
in the 1970s when larger corporations
started creating private networks to share
information with business partners and
suppliers.
• This process, called Electronic Data
Interchange (EDI), transmitted
standardized data that streamlined the
procurement process between businesses,
so that paperwork and human intervention
were nearly eliminated.
• EDI is still in place, and is so effective at
reducing costs and improving efficiency
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that an estimated 95% of Fortune 1,000
companies use it.
• Early EC was pioneered by Internet
companies that didn't (and still don't)
perform traditional retail. Called Pure
Plays.
• More recently click and mortar stores
have moved online like Barnes and Noble,
Best Buy, the Gap, and Wal-mart.
E-commerce has come a long way
in making a customer the king of the
market. There are both brighter and darker
impacts that it is creating for developing
economies. Cited below is little
comparative analysis:
1. The brighter impact:
• Reducing time and space during each
business cycle
• More accountability and transparency
• Better data security against any natural
odd calamities
• More fairness while dispensing the
product and services
• Market moving from top elite classes to
down trodden masses
• Better regulation in market distribution
• Ending of license raaj and monopolistic
market
• Better decisions are taken with more
clarity
2. The darker impact:
• Unrealistic branding of the product
• Usability of products has gone down
• No regulation on the pricing
• In the name of customization quality has
been compromised
• It has created more rift between the rich
and the poor
• Lot of cyber crimes and financial
bankruptcy has been the order of the day
What is E-commerce? It is clear that e-commerce is a very
broad concept and does not have a clear
cut definition. One way of defining it, is
that, it is a way of doing business
transactions via the internet. E-commerce
or e-business is based on the electronic
processing and transmission of data,
including text, sound, and video. E-
commerce as it is commonly known is the
use of technology to conduct financial
transactions online.
Objective Mix: The findings indicate that e-
commerce benefits are, by and large,
limited to improvements in intra- and inter
organizational communications. More
strategic benefits relating to market access,
customer/supplier linkages or cost savings
were not found in the majority (more than
80%) of organizations surveyed. This
therefore limits the likelihood of broader
benefits such as incorporation into global
supply chains, disintermediation, and
improved competitiveness.
Future of E-Commerce :
eMarketer, an Internet technology
(IT) research and reporting firm, estimates
that the dollar figure for e-commerce will
rise from approximately – U.S. $18 billion
in 1998 to
– U.S. $294 billion in 2002. US – Or
maybe $184 billion by 2004.
(Forrester, Business 2.0 Jan 2000)
• In Europe, consumers' internet purchases
will jump from: – US $2.9 billion in 1999
to – US $174 billion in 2005.
• Online business-to-business e-commerce
is projected to speed past $1 trillion in
annual revenue by 2003
#.E-commerce Market Models:
1. Business to Business (B2B) Business to
Business or B2B refers to e-commerce
activities between businesses. These
transactions are usually carried out through
Electronic Data Interchange . This allows
more transparency among business
involved; therefore business can run more
efficiently. E-commerce uses a range of
technologies. Some technologies such as
electronic data interchange (EDI) ,
electronic mail (e-mail), electronic funds
transfer (EFT), are already in wide use.
Some of them (e.g. electronic data
interchange - EDI), will require agreement
between trading partners (buyers and
suppliers) in order to govern their
electronic trading relationship. Electronic
Data Interchange (EDI) (Electronic Data
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Interchange) is a standard format for
exchanging business data.
2. Business to Customer (B2C) Business to
Customer or B2C refers to e-commerce
activities that are focused on consumers
rather than on businesses.
3. Customer to Business (C2B) Customer
to Business or C2B refers to e-commerce
activities, which uses reverse pricing
models where the customer determines the
prices of the product or services. There is
increased emphasis on customer
empowerment.
4. Customer to Customer (C2C) Customer
to Customer or C2C refers to e-commerce
activities, which uses an auction style
model. This model consists of person-to-
person a transaction that completely
excludes businesses from the equation.
Advantages of E-commerce:
For Consumers • Reduced Prices •
Global Marketplace • 24 Hour Access For
Businesses • Increased Potential Market
Share • Low-Cost Advertising • Low
Barriers to Entries Disadvantages of E-
commerce7 For the Consumer • Unable to
Examine Products Personally • Online
Purchasing Security For the Business •
Hardware and Software • Maintenance of
Website • Costs • Website Stickiness and
Customer Loyalty • Training and
Maintenance .
How E-commerce will affect the
Economy?
The electronic economy will force
change within nation states. The modern
nation state remains the most prevalent
unit of governance in the developed and
the developing world. The concept has, in
the last 50 years, been extended rather than
retracted. There are now more than 200
hugely different nation states, with
different legal and regulatory systems,
existing in the world. In this context, we
define a nation state as a coherent territory
circumscribed by defined borders over
which the single national government has
legitimate jurisdiction. During its 200 year
history, the nation state has endured many
changes. However, the advent of the
electronic economy is confronting the
nation state, with intimations of a future in
which its relevance to its citizens and
enterprises will be challenged. The
apparatus of economic regulations and
taxation through which nation states
operate was developed to support and
facilitate industrial economy. That
economy produces tangible and location
bound services that are sold and
distributed within and between fixed
borders. In that familiar world of national
and international trade, nation states have a
variety of tools at their disposal to achieve
their economic ends. They can levy tariffs
on imports, raise taxes, protect consumers
rights, punish economic criminals, set
commercial standards, and provide
guarantees of monetary payment. Until
recently, these tools were supported by
governments majority control over
communications networks and information
dissemination . Because of the emergence
of global communications networks, the
nation state is gradually losing monopoly
control of information and financial flows.
Private individuals and enterprises and
groups now have the ability to source ,
package, and transmit information in
compressed time and space. Through
―digitization‖ currency, services, and even
some goods can be conveyed immediately,
transacted invisibly across the globe.
Interactive networks are creating a new,
network-linked world without borders, in
which many commercial transactions are
beyond the reach of national jurisdictions,
laws, and taxation systems. As a result,
many of the economic instruments and
processes of the nation state need to be
reexamined in the light of these new
challenges. It is nation state powerless
before this new global economic system
?As electronic commerce grows, there is
some risk that those nation states that have
not fully embraced the changes could
become marginal to the creation of
economic value and electronic economy?
Could the changes erode the individuals
sense of national belonging, undermine tax
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bases, bypass national laws and undermine
the rights of citizens?
Benefits of e-commerce on Economy: The benefits of e-commerce on
economy are classified into three groups:
firms, prices, productivity. A combination
of technological and market forces have
compelled companies to examine and
reinvent their supply chain strategies. To
stay competitive, firms have searched for
greater coordination and collaboration
among supply chain partners to wring out
the inefficiencies that might exist within
firm transactions. Many of the transactions
can be done externally, via electronic
markets. The Internet and its applications
have thus served to enhance the process to
increase efficiencies in supply chain
management The available empirical
evidence on price is mixed. Some of the
first studies found that prices of goods sold
through the Internet were on average
higher than their equivalent purchased
through traditional retailers. A more recent
study, however, found prices for books
and CDs on average to be about 10 per
cent lower on the Internet compared with
traditional retailers in the United Most
importantly, productivity increased not
only in the information and
communication producing sectors but in
sectors of the economy that do not produce
information and communications
technology . In other words, users of these
technologies also benefited from increased
productivity. Effects of e-commerce on
international trade and employment
Electronic commerce offer important
opportunities to both developing and
developed countries. The development of
e-commerce is likely to have both direct
and indirect impacts on international trade
as well as the labor markets.
Major Hypothesis:
• Women take control. Women make or
influence 80 percent of household sales in
the United States, according to Woman
Trend, despite the fact that they make up
51 percent of the population.
• The untapped get tapped. Two highly
touted markets $509 million health and
beauty, and $513 million grocery still lag
behind expectations.
• More "click and mortar." Traditional
retailers Circuit City, Crate and Barrel,
Sears, Toys R Us, Wal-Mart, and
Federated Department Stores missed the
boat in 1995 and 1996, but rest assured
they "get it" now, and are attempting re-
entry, this time around with more money
and smarts. Watch out.
Brand extension strategy in E-
Commerce domain:
Brand Extension is a wonderful
way to achieve business growth by
exploiting the untapped equity of a brand
to enter new product categories. A well-
executed brand extension strategy can lead
to several benefits- increased brand
visibility and consumer connections,
incremental shelf space at retail, entry into
new distribution channels and enhanced
brand associations.
Research indicates that brand
extensions of existing brands are five
times more successful than launching a
new brand. By setting up positive
consumer expectations about performance
and better retailer focus due to the
anticipated consumer demand, brand
extensions reduce the risk of failure. Also
from a marketing perspective, it is easier
to focus on just the new product rather
than creating awareness for both the new
brand and the new product. Thus, overall,
brand extension can be a very effective
brand and business growth strategy.
However, a significant proportion
of brand extensions are unsuccessful and
thus it requires careful analysis to
determine the right categories for
extension as well as the approach to enter
those categories.
Some key things to consider while
evaluating the categories for extension:
•Existing brand associations and imagery
need to have a good ‗fit‘ with the proposed
categories. For example, Horlicks‘ brand
extension into noodles did not find success
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in the Indian market due to the brand‘s
strong association with health (rather than
taste, which is critical for the snacking
category).
•It is easier to extend a brand with abstract
associations into multiple categories. For
example, the brand Porsche has been
successfully extended into several
unrelated categories such as eyewear,
luggage, watches, electronics etc. due to its
abstract association with style and design
rather than just sports-car expertise.
•The proposed extension must offer a clear
differentiation from the competitors while
staying true to the brand‘s core values and
equities. For example, Godrej Consumer
Products (GCPL) recently launched a
premium hair-colour range in India under
the salon brand BBLUNT. With its
services expertise, a cool and funky image
along with a strong foothold in Bollywood,
the brand extension offers a strong
differentiation in a segment dominated by
international brands.
•Size of the proposed category and degree
of saturation should be assessed to
determine the chances of success. It is
relatively easier for a new entrant to
sustain and thrive in a large category.
•Some categories are fragmented and have
no major players with significant market
shares. This could present an attractive
opportunity for brand extensions.
After short listing the categories,
the brand owner needs to evaluate the right
approach to enter those categories. One
approach is for the brand owner to
manufacture and market these products
themselves. An alternative approach is for
the brand owners to allow another
company to produce and market these
products and in return for the use of their
brand, charge the manufacturer a royalty
fee. Such an arrangement is called brand
licensing and can be a very lucrative yet
low-cost and low-risk brand development
strategy. Several global brands including
Philips, Honeywell, DuPont, Armani,
Versace, Calvin Klein and Ferrari have
embraced the brand licensing approach to
extend into non-core categories and grow
their brands.
The right brand extension approach
could be determined using the following
factors: •Product development capabilities:
Entering a new category could involve
significant investments in product design,
development and manufacturing
infrastructure. In such cases, a brand
licensee with product expertise relevant to
the new category could be better suited to
manage the brand extension while the
brand owner maintains control over the
brand image through a rigorous approval
process.
•Size of the category: In some cases the
market size of the proposed category for
brand extension is quite small and
unattractive for the brand owner to invest
their own time and resources which could
be better utilized in the expansion of the
core business. In such cases, the brand
licensing approach could be better suited.
•Distribution channels: Sometimes the
brand extensions are better suited to be
sold through channels which are not being
reached by the brand owner with their core
products. In such cases, a brand licensee
with an existing distribution network in the
new category is critical to achieving faster
retail placement, wider distribution and
hence better results.
Brand extensions can be a significant
boost to your company‘s bottom line but
only if you choose the right categories as
well as the right brand extension approach.
Implementation Post analysis :
As communications costs continue
to fall, the potential for international
outsourcing grows. As a result,
outsourcing management and production
activities will become more important.
Obviously, some sectors and activities
throughout the world are more prone than
others to be affected by developments in e-
commerce. In this respect, there have been
attempts to identify industries or sectors
that may be more predisposed to the
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effects of developments in e-commerce
and technology.
For example, a research, based on
criteria that weighed the effect of cost
savings, increases in productivity, industry
readiness and product fitness to e-
commerce, has elaborated an index of
Internet intensiveness. The finding based
on data from the United States and Europe
suggests that the most internet intensive
sectors are electronic components, food,
pharmaceuticals and forest/paper products.
It is likely to expect that in other regions,
these same sectors and industries will be
affected by e-commerce via outsourcing.
At the same time, recent evidence suggests
that transnational corporations are likely to
be the most intensive users of electronic
commerce. The potential benefits from
international e-commerce to a developing
country arise from a reduction in the cost
of imports as much as from an increase in
the price received for exports.
Several recent studies have
suggested that trade also stimulates
internet use. For example, a study suggests
that the extent to which a country is
integrated into the global economy can
play a role in its access to IT. Countries
with greater contact, either via trade,
tourism, or geographical location, with the
outside world, are more likely to be
advanced in digital technology than other
countries . Several recent studies have
asked whether internet use affects trade.
For example, using data from 20 low and
middle income countries in Eastern Europe
and Central Asia, a research shows that
enterprises with internet connections
export more, as a share of their total sales,
than enterprises without connections. In
addition, using a gravity model of trade,
another research find that Internet use
appears to be significantly correlated with
trade after 1996, although it finds only a
weak correlation in 1995 and 1996. The
same research also found that internet has
a greater effect on trade in developing
countries than it does in developed
countries. In a second paper, same
researchers find that exports of services to
the United States grew more quickly for
countries with greater internet penetration
in a sample of 31 middle and high-income
countries. Developing countries with
higher Internet penetration export more to
high-income countries than do developing
countries where penetration is lower.
However, they do not appear to export
more to other developing countries and
high-income countries with greater
Internet penetration do not appear to
export more to either developing or
developed countries. These results make
intuitive sense. First, Internet access is so
common among manufacturing enterprises
in high-income countries that the
differences in the number of internet users
as a percent of the population probably
reflects differences at the consumer, rather
than the enterprise, level in developed
countries. In developing countries,
contrarily, many manufacturing enterprises
remain unconnected. Second, because
Internet access is less common in
developing countries than in developed
countries, being connected to the Internet
would seem to be a greater advantage for
enterprises in developing countries with
respect to exporting to developed
countries. Finally, because of strong
regional differences in income, and taking
into account the fact that most exports
from developing countries to other
developing countries will be within the
same region, communication costs will
presumably be greater for exports to
distant developed countries than it would
be for exports to neighboring developing
countries
Conclusion: Electronic commerce may have
large economic effects in the future.
Internet commerce will change the face of
business forever. Moreover, e-commerce
will change banking in 21st century. The
e-commerce has affected the global
economy in many different ways.
First of all, it has affected the
information technology, and all the
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economic sectors, all and above e-
commerce has enhanced the productivity
growth worldwide and here we are going
to discuss this impact, they are able to
identify the number of qualified people
needed to advance their country‘s
information economy or to calculate the
amount of investments needed to provide
business with access to the internet.
Some countries are already
benefiting from the results, they are now in
opposition to benchmark their economies
with competitors internationally and there
are many ways to accelerate the growth of
productivity but the reason for this is
rather controversial. Banks and financial
services companies in the developing
countries will need to adopt online
payment system, to obtain e-trade finance
and equity investment, tourism and its
internet incarnation is regularly cited as
one of the fastest growing e-commerce
sectors.
The impact of e-commerce on
developing countries could be even
stronger than that on developed countries
because the scope for reducing
inefficiencies and increasing productivity
is much larger in the developing countries.
By cutting costs, increasing efficiency and
reducing time and distance, e-commerce
could become an important tool for
development.
References:
1. https://www.statista.com/statistics/220
177/b2c-e-commerce-sales-cagr-
forecast-for-selected-countries/
2. Wienclaw, Ruth A. "E-Commerce."
Research Starters: Business, 2013.
EBSCOhost,
ezproxy.mga.edu/login?url=http://searc
h.ebscohost.com/login.aspx?direct=tru
e&db=ers&AN=89163657&site=eds-
live&scope=site.
3. Power, Michael 'Mike' (19 April
2013). "Online highs are old as the net:
the first e-commerce was a drugs
deal". The Guardian. London.
Retrieved 17 June 2013.
4. Tkacz, Ewaryst; Kapczynski, Adrian
(2009). Internet — Technical
Development and Applications.
Springer. p. 255. ISBN 978-3-642-
05018-3. Retrieved 28 March 2011.
The first pilot system was installing in
Tesco in the UK (first demonstrated in
1979 by Michael Aldrich).
5. 1988 Palmer.C Using IT for
competitive advantage at Thomson
Holidays, Long range Planning Vol 21
No.6 p26-29, Institute of Strategic
Studies Journal,London- Pergamon
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Hpandurang92". Study mode.
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7. "Online shopping: The pensioner who
pioneered a home shopping
revolution". BBC News. 16 September
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8. Aldrich, Michael. "Finding Mrs
Snowball". Retrieved 8 March 2012.
9. "The Electronic Mall". GS Brown. 30
April 2010. Retrieved 17 June 2013.
10. "Tim Berners-Lee: WorldWideWeb,
the first Web client". W3. Retrieved 21
December 2012.
11. Geiger, Conrad. "NeXT Nugget
News". next.68k.org. Conrad Geiger.
Archived from the original on 8
September 2015.
12. "AppWrapper Volume 1 Issue 3 Ships"
(press release).
13. "Attention Shoppers: Internet Is
Open". The New York Times. 12
August 1994.
14. Kevin, Kelly (August 2005), "We Are
the Web", Wired, 13 (8)
15. "First Electronic Stamps Being Put to
Test". Sunday Business. 6 April 1998.
Retrieved 16 July 2013.
16. Teriz, N (2011). "The impact of e-
commerce on international trade and
employment". Procedia - Social and
Behavioral Sciences. 24: 745–753.
doi:10.1016/j.sbspro.2011.09.010.
Retrieved 2017-05-11.
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17. "eBay acquires PayPal". Investor.
eBay. Retrieved 21 December 2012.
18. "Diane Wang: Rounding up the "Ant"
Heroes". Sino Foreign Management.
Archived from the original on 23
February 2012. Retrieved 3 September
2011.
19. "R.H. Donnelley Acquires
Business.com for $345M". Domain
Name Wire. Retrieved 4 September
2011.
20. "Amazon Buys Zappos; The Price is
$928m, not $847m". TechCrunch. 22
July 2009. Retrieved 21 December
2012.
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RECENT TRENDS IN NEWSPAPER MARKETING
NEETA MANOHAR KEDAR
Research Scholar in Commerce,
Pune, Maharashtra.
DR. P. V. SATHE
Professor in Commerce,
B. M. College of Commerce, Pune,
Maharashtra
Abstract
Newspaper has become a crucial part of any modern society. This is one of the most
important consumer products of our daily life. Like all other consumer goods newspaper
industry requires some special marketing efforts. The ever-changing newspaper industry
provides publishers with many challenges. But the changes also give them the opportunity to
be creative with how they market their newspapers. The main focus of this article is to
describe the recent trends in marketing the newspaper.
Keywords: Newspaper, Newspaper marketing Strategy, Promotional device, Reader
Engagement.
Introduction:
A newspaper is a serial publication
issued at frequent intervals and devoted
primarily to news. Newspapers are not only
the collectors of news but they have
accounts of the activities of a country‗s
social, political, cultural activities with all
sourceful objectives. Modern newspaper is a
history in pieces. It is a powerful report of
the daily life. The modern news for the sake
of future reminds the lessons of past to
balance the present times. Newspaper in
modern times is much more interesting and
fruitful publication in comparison to a noval
written and presented in visual form with
status full lifestyle.- Arvind Kumar (Ex.
Editor ‗Madhuri‗)
Most newspapers are issued daily or
weekly. Some are published semi-weekly,
and there have been rare example of
fortnightly and monthly newspaper.
Having correct and fresh news, articles and
other information, which are to be informed
to readers in a time frame of daily or weekly
schedule in printed folder is called
newspaper. - Free News Dictionary
Newspaper Marketing:
Newspapers face unrelenting
competition from other consumer
information sources. Cable television
provides 24-hour-a-day news along with in-
depth coverage of major events and news
stories. Broadcast and cable channel Internet
sites often cover additional story angles and
frequently update content in close to real
time. In contrast, a newspaper operates on
non-negotiable production deadlines that
limit the freshness of its content. This
reduced ability to provide current news, plus
readers' tendency to only view select
newspaper sections, has helped drive a
decline in overall newspaper circulation. The
marketing-mix is pressurizing the
newspapers production houses to make
changes in their management process and its
attitudes.
Circulation and Advertising to a
newspaper industry is what blood circulation
is to a human body. These are the two main
sources of income. But advertisement
income depends on the circulation of a
newspaper. Circulation is the force that
makes advertisements pay.So every
newspaper plans its strategy to increase their
circulation. They plan their product to meet
demands of customer or readers.
Significance of marketing newspaper:
The heart of your business success
lies in its marketing. Most aspects of your
business depend on successful marketing.
The overall marketing umbrella covers
advertising, public relations, promotions and
sales. Marketing is a process by which a
product or service is introduced and
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promoted to potential customers. The other
benefits of marketing newspaper are:
1. Higher sales
2. Company reputation
3. Targeted Geographic Audience
4. Build trust
5. Promotion of your business
6. Enhanced brand recognition
7. Improving the businesses profits by
boosting sales.
Trends in newspaper marketing: Here are
key trends in marketing newspaper to
prepare for in the coming year:
New promotional devices
There has been an increase in
promotions with financial incentives for the
reader. This is a much more cost-effective
promotion than having to buy and produce
numerous free give-aways. The grocery
promotions have achieved some good uplifts
in sales.
These promotions have also led to a
new wave of substantial free product offers
whereby the reader collects tokens in return
for a high value or cutting-edge product such
as digital TV boxes, MP3 players and so on.
These offers have the advantage of locking
the reader in for a period of time and not just
the one-off occasion of a cover-mounted
promotion.
However, though there are fewer
cover-mounted give-aways, there is still a
need to attract readers with product offers
and this is now increasingly achieved
through ‗Free for every Reader‘ offers that
allow the reader to pick up a free product at
a retailer or by post.
Locking readers in
By far the biggest change in
newspaper marketing has been the
concentration on ‗locking readers in‘ via
subscriptions, newsagent home delivery or
direct home delivery. Once readers are
locked into these schemes, there is a growing
emphasis on readers‘ clubs – whereby loyal
readers are offered a raft of exclusive offers
to keep them subscribing..
There is also a very aggressive marketing
campaign in the quality press to get readers
to subscribe to up-front subscriptions
schemes. Full-page adverts appear each
week offering readers gifts such as free
magazine subscriptions, or free cinema
tickets to readers who subscribe.
Reader engagement The other main area of change is
‗reader engagement‘ marketing. Sponsorship
of events and festivals, exclusive reader
evenings, national competitions and awards
ceremonies are increasing as newspaper
publishers seek to interact with their readers
and achieve brand awareness for their
papers.
Partnership marketing
This brings on to the newest and
potentially largest area of opportunity,
partnership marketing. The reduction in
marketing spends is not confined solely to
newspapers - it has affected many industries.
This has started to open up true partnership
opportunities whereby newspapers work
with brands to mutual benefit, for example
the Times with Pizza Express, News of the
World with Nails Inc, the Guardian with the
British Red Cross, and the Independent with
the RSPB. Partnerships are starting to
develop whereby content, memberships and
marketing are being genuinely jointly
developed between companies on an
ongoing basis.
Pairing contests
Newspapers have been pairing
contests of different sorts with free
subscription of the newspaper for a period of
time for contest winners. Other than that,
they invite their current and potential
advertisers to sponsor contests in exchange
for publishing their company logos on the
newspaper and on the newspaper webpage.
Essay writing contests
Newspapers have been sponsoring
essay writing contests on their own during
special occasions (i.e. national holidays,
popular events, etc.) to boost readership by
soliciting essay entries from their target
market, and publishing these essays on
scheduled dates to encourage people to buy
copies of the newspaper.
In-house print advertisements
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Newspapers publish in-house print
advertisements in two ways: corporate ad
and testimonial ad Example of a testimonial
ad would be a newspaper featuring a
supposedly real-life story of a real estate
agent sharing his/her success story with her
occupation with the help of the concerned
newspaper‘s paid or free promotion of
his/her real estate job.
Social networking
Newspapers have been actively
pursuing social networking by inviting their
readers to post comments and questions
online and making their newsroom staff and
editorial members to send feedback in the
hope of boosting interaction with them, and
in the process creating virtual relationships
between the newspapers and the public.
Providing freebies
Newspapers have been providing
freebies to its area distributors (newspaper
bulk outlets and retail stores) by handing out
give-away promotional items like pens,
umbrellas, caps, T-shirts, jackets, mugs,
stationery, etc. with the newspapers‘ logo
printed on them.
Sponsoring and participating in live
events
Newspapers have been sponsoring
and participating in live events, TV sports
shows, festivals, exhibits, conventions, and
other relevant affairs and use this approach
cross marketing with other company
participants to grow their readership base.
Include Readers
Let readers in your community put
themselves in the newspaper. A chance to
express their opinions through letters to the
editor was a noble start. Take it a step further
by allowing readers to become the reporter.
Offer them a chance to submit their own
photos and news stories, giving them
incentive to purchase a handful of copies and
tell others about your paper.
Special Sections
Many resourceful small-market
newspapers have launched themed special
sections that appear within the larger
newspaper. These folded tabloids may
include an early June high-school graduation
insert, an August ―Back to School Guide‖ or
a November ―Holiday Gift Guide.‖
Communities that strongly support high
school sports may embrace a football-
focused insert appearing just prior to the
football season. Small-market newspapers
can also publish monthly inserts showcasing
regional attractions and events. Health-
focused publications often feature articles
written by local health practitioners, along
with adjacent advertisements for those
practices. Inserts of all types may offer
attractive ad rates to encourage new
advertisers or to entice existing clients with
multi-issue discounts.
Graphics and Consulting Services
Many newspapers employ talented
graphic designers who use powerful graphics
programs to create visually stunning print
and online ads. The newspaper can minimize
designers' down time by marketing turnkey
graphics design and production capabilities
to local businesses. Finished products can
include fliers, brochures and other company-
specific promotional materials. Although
some current advertisers may use the
service, the newspaper will also appeal to
non-advertisers by offering attractive prices.
A newspaper's Internet advertising expert
can enhance the package with website design
and online marketing components.
Online Sponsorships
Newspaper-operated websites market
online subscriptions to readers who receive
news via Smartphone or other electronic
medium; or to readers who live in other
states or countries. Local readers may also
visit the website often for breaking news
updates. While many businesses place full-
color online advertisements, some out-of-
the-box advertiser‘s sponsor frequently
viewed online features. For example, a
coastal newspaper's readers often monitor
weather forecasts, especially during
hurricane season. A disaster restoration
company would likely receive increased
visibility by sponsoring the weather forecast
and hurricane map. Likewise, a funeral home
would likely benefit by sponsoring the
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newspaper's obituary page. Encourage ad
reps to emphasize the synergy of advertiser
focus and online content as a way of
encouraging new sponsorships.
Smart phones Smart phones are commonly used
nowadays. Every person has access to
smartphones. Smartphone are small portable
devices used for communication with
additional functionality of cameras, music
players etc. Mobile cameras are the main
source of live reporting and mobile
journalism now.
Newspaper Kiosks
Newspaper businesses can establish
kiosks in well-traveled areas like shopping
malls, post offices or train stations as a
marketing strategy. Kiosks can sell current
copies of the newspaper, but also provide
customer services, such as subscription
renewals, address changes and classified ad
sales. Marketing tactic can include selling
branded goods including canvas bags, hats
or coffee cups emblazoned with the
newspaper logo.
Branded Promotional Gifts
Giving away functional branded gifts
can be a more effective promotional move.
Ink pen, key chain or calendars are gifts you
can give your customers that they may use,
which keeps your newspaper in plain sight.
Customer Appreciation Events
Emphasis, on customer appreciation
event with free refreshments and door prizes
will attract customers, with no purchase of
anything necessary, is an effective way to
draw not only current customers but also
potential customers.
After-Sale Customer Surveys
Contacting customers by telephone
or through the mail after a sale is a
promotional strategy that puts the
importance of customer satisfaction first
while leaving the door open for a
promotional opportunity. Skilled salespeople
make survey calls to customers to gather
information that can later be used for
marketing by asking questions relating to the
way the customers feel about the newspaper.
Conclusion:
Successful marketing requires us to
not only know what customers want to buy,
but also how they want to buy. We need to
double our efforts to make sure we are
providing the options and capabilities
customers expect from any business. To do
anything less, is to negate the benefits gained
from understanding customers, creating
products that fulfill their needs and
marketing smart. Hence, effective marketing
strategies help to increase readership and
newspaper business in competitive world.
References:
1. Aleesha Patel, (2010), ―The Survival of
the Newspaper in the Digital Age of
Communication‖, Published by Leonard
N. Stern School of Business, New York
University.
2. Rahmani, H. Mujaviri and A Allah
Baksh (2012), ―Reviewing the impact of
advertising and sales promotion on brand
with‖, the Journal of Business Studies
Quarterly, Vol. 4., No. 1.
3. Hooley, G., Piercy, Nigel F., and
Nicoulaud, (2009). Marketing Strategy
and Compatitive Positioning (4th ed.).
Delhi: Pearson Education.
4. Baack, K. E. (2009). Integrated
Advertising, Promotion, and Marketing
Communications (3rd ed.). Delhi:
Pearson Education.
5. Cooper, D. and Schindler Pamela,
(2007). Marketing Research: Concepts
and Cases (2007 ed.). New Delhi: Tata
McGraw Hill.
6. Strauss Judy and Frost Reymond, (2012).
E- Marketing (6th ed.). New Delhi: PHI.
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BASIC CONCEPTS OF GOODS AND SERVICES TAX IN INDIA
SUPRIYA UTTAM JADHAV
M.Phil.Scholars,
C.D Jain Collage of Commerce,
Shrirampur, Maharashtra.
Abstract
This paper is an analysis of what the impact of GST (Goods and Services Tax) will be
on Indian Tax Scenario. Here stated with a brief description of the historical scenario of
Indian taxation and its tax structure. Then the need arose for the change in tax structure from
traditional to GST model. GST has be detailed discuss in this paper as the background, silent
features and the impact of GST in the present tax scenario in India. The Goods and Services
Tax (GST) is a value added tax to be implemented in India, the decision on which is pending.
GST is the only indirect tax that directly affects all sectors and sections of our economy.
Ignorance of law is no excuse but is liable to panel provisions, hence why not start learning
GST and avoid the cost of ignorance. Therefore, we all need to learn it whether willingly or
as compulsion. The goods and services tax (GST) is aimed at creating a single, unified
market that will benefit both corporate and the economy. The changed indirect tax system
GST-Goods and service tax is planned to execute in India. Several countries implemented this
tax system followed by France, the first country introduced GST. Goods and service tax is a
new story of VAT which gives a widespread setoff for input tax credit and subsuming many
indirect taxes from state and national level. The GST Implementation is not yet declared by
government and the drafting of GST law is still under process and a clear picture will be
available only after announcement of Implementation. India is a centralized democratic and
therefore the GST will be implemented parallel by the central and state governments as
CGST and SGST respectively. The objective will be to maintain a commonality between the
basic structure and design of the CGST, SGST and SGST between states .In this article, I
have started with the introduction, in general of GST and have tried to highlight the
objectives the proposed GST is trying to achieve. Thereafter, I have discussed the possible
challenges and threats; and then, opportunities that GST brings before us to strengthen our
free market economy.
Key Words: GST, CGST, SGST, VAT, INPUT CREDIT
What is Tax?
The word tax is derived from the
Latin word ‗taxare‘ meaning to estimate. A
tax is not a voluntary payment or donation,
but an enforced contribution, exacted
pursuant to legislative authority" and is any
contribution imposed by government
whether under the name of toll, tribute,
impost, duty, custom, excise, subsidy, aid,
supply, or other name.‖In 1922, the country
witnessed a paradigm shift in the overall
Indian taxation system. Setting up of
administrative system and taxation system
was first done by the Britishers. Broadly,
there are two types of Taxes viz. Direct and
Indirect taxes. Taxes in India are levied by
the Central Government and the State
Governments. Some minor taxes are also
levied by the local authorities such as
Municipality or Local Council. The authority
to levy tax is derived from the Constitution
of India which allocates the power to levy
various taxes between Centre and State.
Definition of GST:
―GST is a tax on goods and services
with value addition at each stage
having comprehensive and continuous chain
of set of benefits from the producer‘s or
service provider‘s point up to the retailers
level where only the final consumer should
bear the tax.‖
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Objectives of GST: 1. One Country – One Tax.
2. Consumption based tax instead of
Manufacturing.
3. Uniform GST Registration, payment and
Input tax Credit.
4. To eliminate the cascading effect of
Indirect taxes on single transaction.
5. Subsume all indirect taxes at Centre and
State Level under.
6. Reduce tax evasion and corruption.
7. Increase productivity.
8. Increase Tax to GDP Ratio and revenue
surplus.
9. Increase Compliance.
10. Reducing economic distortions.
GST Advantages and Disadvantages:
The GST is a Value added Tax
(VAT) is proposed to be a comprehensive
indirect tax levy on manufacture, sale and
consumption of goods as well as services at
the national level. It will replace all indirect
taxes levied on goods and services by the
Indian Central and State
governments. Though GST is considered to
be a historical tax reform in India, it also has
some demerits. We here would look into
GST Taxation and deal with its advantages
and disadvantages.
GST Advantages:
1. GST is a transparent tax and also reduces
number of indirect taxes.
2. GST will not be a cost to registered
retailers therefore there will be no hidden
taxes and the cost of doing business will
be lower.
3. Benefit people as prices will come down
which in turn will help companies as
consumption will increase.
4. There is no doubt that in production and
distribution of goods, services are
increasingly used or consumed and vice
versa.
5. Separate taxes for goods and services,
which is the present taxation system,
requires division of transaction values
into value of goods and services for
taxation, leading to greater
complications, administration, including
compliances costs.
6. In the GST system, when all the taxes
are integrated, it would make possible
the taxation burden to be split equitably
between manufacturing and services.
7. GST will be levied only at the final
destination of consumption based on
VAT principle and not at various points
(from manufacturing to retail outlets).
This will help in removing economic
distortions and bring about development
of a common national market.
8. GST will also help to build a transparent
and corruption free tax administration.
9. Presently, a tax is levied on when a
finished product moves out from a
factory, which is paid by the
manufacturer, and it is again levied at the
retail outlet when sold.
10. GST is backed by the GSTN, which is a
fully integrated tax platform to deal with
all aspects of GST.
GST Disadvantages:
1. Some Economist says that GST in India
would impact negatively on the real
estate market. It would add up to 8
percent to the cost of new homes and
reduce demand by about 12 percent.
2. Some Experts says that CGST (Central
GST), SGST (State GST) are nothing but
new names for Central Excise/Service
Tax, VAT and CST. Hence, there is no
major reduction in the number of tax
layers.
3. Some retail products currently have only
four percent tax on them. After GST,
garments and clothes could become more
expensive.
4. The aviation industry would be affected.
Service taxes on airfares currently range
from six to nine percent. With GST, this
rate will surpass fifteen percent and
effectively double the tax rate.
5. Adoption and migration to the new GST
system would involve teething troubles
and learning for the entire ecosystem.
India GST – The difference between
CGST, SGST and IGST CGST, SGST and IGST are three
components of GST tax law. CGST and
SGST are applicable within the state while
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IGST is applicable in the course of interstate
trade and commerce. Let us understand the
difference between the trios,
Basis of
Distinctio
n
Central
GST
State
GST
Integrat
ed GST
Meaning
It is
levied by
Central
governm
ent to
replace
the
existing
tax like
service
tax,
excise,
etc
It is
levied by
State
governm
ent to
replace
the
existing
tax like
sales tax,
luxury
tax,
entry
tax, etc.
It is a
combine
d form of
CGST
and
SGST
levied
and
collected
by
Central
governm
ent.
Applicab
ility
It is
applicabl
e only
within
the state
It is
applicabl
e only
within
the state
It is
applicabl
e only in
the
course of
interstate
supply.
Input
Tax
Credit
The
credit of
CGST,
is
available
only
against
CGST
and
IGST
The
credit of
SGST is
available
only
against
SGST
and
IGST
The
credit of
IGST is
available
against
CGST,
SGST
and
IGST.
Collectio
n of tax
It is
collected
by
central
governm
ent
It is
collected
by State
governm
ent
It is
collected
by
central
governm
ent
Exemptio
n limit
The
exempti
on limit
of Rs.20
Lakh is
applicabl
e
The
exempti
on limit
of Rs.20
Lakh is
applicabl
e
No
exemptio
n limit is
applicabl
e.
Composit
ion
Scheme
The
dealer
can use
the
benefit
of
composit
ion
scheme
up to
turnover
of 50
lakh.
The
dealer
can use
the
benefit
of
composit
ion
scheme
up to
turnover
of 50
lakh.
Composi
tion
scheme
is not
applicabl
e in the
course of
interstate
supply.
Free
Supplies
Applicab
le on
free
supplies
Applicab
le on
free
supplies
Applicab
le on free
supplies
Registrat
ion
No
registrati
on till
the
turnover
crosses
20 Lakh
(10 Lakh
in north
eastern
states).
No
registrati
on till
the
turnover
crosses
20 Lakh
(10 Lakh
in north
eastern
states).
Registrat
ion
mandator
y if any
supply is
made
outside
the state.
THE IMPACT OF GST (GOODS AND
SERVICES TAX) IN INDIA
After a lot of deliberation, our GST
council has finalized the rates for all the
goods and major service categories under
various tax slabs, and the GST is expected to
fill the loopholes in the current system and
boost the Indian economy. This is being
done by unifying the indirect taxes for all
states throughout India.
The tax rate under GST are set at 0%,
5%, 12%, 18% and 28% for various goods
and services, and almost 50% of goods &
services comes under 18% tax rate. But how
is our life going to change post GST. Let‘s
see how GST on some day-to-day good and
services will have an impact on an end user‘s
pocket.
1) Footwear& Apparels/Garments: Footwear costing more than INR 500 will
have a GST rate of 18% from an earlier rate
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of 14.41 rate but rates for the footwear
below INR 500 has been reduced to 5%. So,
you need to shell out more for buying a
footwear above INR 500/-. And with respect
to the ready-made garments, the rates have
been reduced to 12% from an existing
18.16% this will make them cheaper.
2) Cab and Taxi rides: Now, taking an Ola
or an Uber will be cheaper because the tax
rate has come down to 5% from an earlier
6% for a cab booking made online.
3) Airline tickets: Under the GST, tax rate
for economy class for flight tickets is set at
5% but the tax for business class tickets will
have a higher tax rate of 12%.
4)Train Fare: There will not be much of an
impact. The effective tax rate has increased
from 4.5% to 5% in GST. But, a passenger
who travels for business trips can claim
Input Tax Credit on their rail ticket which
can help them to reduce expenses. People
travelling by local trains or in the sleeper
class will not be affected, but first-class &
AC travellers will have to pay more.
5) Movie Tickets: Movies tickets costing
below INR 100 will be charged a GST rate
of 18% but prices above INR 100 will have a
higher tax rate of 28%.
6) Life Insurance Premium: The Premium
Amounts on policies will rise, with an
immediate impact can be seen on your term
and endowment policy premiums as the rates
have been increased under GST across life,
health and general insurance.
7) Mutual funds Returns: GST impact on
your returns from mutual funds‘ investments
will largely be marginal as the GST will be
charged on the TER i.e. Total Expense Ratio
of a mutual fund. The TER is commonly
called as expense ratio of a mutual fund
company, and the same is set to go up by
3%. The return what you get as an investor
will be reduced to that extent unless the
respective mutual fund company i.e. AMC
absorbs it but that anyhow will be a marginal
difference.
8) Jewellery: The gold investment will
become slightly expensive because there will
be 3% GST on gold & 5% on the making
charges. The earlier tax rate on gold was
around 2% in most of the states and the GST
is increased from the existing rate to around
2% to 3%.
9) Buying a Property: Under construction
properties will be cheaper than read-to-
move-in properties. The GST rate for an
under-construction property is 18% but the
effective rate on this kind of property will be
around 12% due to input tax credits the
builder will avail of.
10) Education& Medical Facilities: Education and Medical sectors have been
kept outside the GST ambit and both the
primary education & healthcare is exempt
from GST. It means a consumer will not pay
any tax for the money you spent on these
services. But due to increase in the rate of
taxes for certain goods & services as
procured by these organizations, they may
pass on the additional tax burden to the
consumers.
11) Hotel Stay: For your hotel stay, if your
room tariff is less than Rs 1,000, then there
will be no GST, but anything above Rs 5,000
will attract 28% tax.
12) Buying a Car: Most of the cars in the
Indian market will become slightly cheaper,
except for the hybrid cars because the GST
rate will be 28% tax on all the vehicles
irrespective of their make, engine capacity or
model. However, over and above this 28%,
an additional cess will be levied which can
be either 1%, 3% or 15 %, depending on the
particular car segment.
13) Mobile Bills: People will have to pay
more on mobile phone bills as GST on
telecom services is now 18%, as opposed to
the earlier tax rate of 15%. However,
telecom companies may absorb this 3% rise
due to fierce competition.
14) Restaurant Bills/EATING OUT: Your
restaurant bill would depend on whether you
dined at an AC or Non-AC establishments
which do not serve alcohol. Now dining at
five-star hotels will be charged at 18% GST
rate and the Non-AC restaurants will be
charged 12% and a 5% GST will be charged
from small hotels, dhabas and restaurants
that do not cross an annual turnover of INR
50 Lakh.
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15) IPL & other related events: Events like
IPL i.e. sporting events will have a 28%
GST rate which is higher than the earlier
20%.rates. This will increase the price of
your tickets. And the GST rate for other
events like theatre, circus or Indian classical
music shows or a folk dance performance or
a drama show will be at 18% GST rate, this
is lesser than the earlier tax rate.
16) DTH and cable services: The money
you pay towards your DTH (Direct-To-
Home) connections or to your cable operator
will reduce a bit as the rate is fixed at 18%,
which is lower than the earlier taxes which
were comprising of entertainment tax in the
range of 10% to 30%, apart from the service
tax of 15%.
CONCLUSION
GST is the most logical steps towards
the comprehensive indirect tax reform in our
country since independence. GST is liveable
on all supply of goods and provision of
services as well combination thereof. All
sectors of economy whether the industry,
business including Govt. departments and
service sector shall have to bear impact of
GST. All sections of economy viz., big,
medium, small scale units, intermediaries,
importers, exporters, traders, professionals
and consumers shall be directly affected by
GST...One of the biggest taxation reforms in
India -- the Goods and Service Tax (GST) --
is all set to integrate State economies and
boost overall growth. GST will create a
single, unified Indian market to make the
economy stronger. Experts say that GST is
likely to improve tax collections and Boost
India‘s economic development by breaking
tax barriers between States and integrating
India through a uniform tax rate. Under
GST, the taxation burden will be divided
equitably between manufacturing and
services, through a lower tax rate by
increasing the tax base and minimizing
exemptions.
References
1) http://goodsandservicetax.com/gst/showt
hread.
2) http://en.wikipedia.org/wiki/Goods_and_
Services_Tax_(India) accessed on 15 Jan
2014.
3) http://www.taxmanagementindia.com/vis
itor/de
4) http://www.gstindia.com/http://www.thehi
ndubusinessline.com/todays-paper/tp-
others/tp- taxation/article2286103.ece
5) http://economictimes.indiatimes.com/top
ic/GST
6) http://www.moneycontrol.com/news-
topic/gst/
7) http://www.business-
standard.com/article/economy-
policy/gst-reform-may-be-implemented-
after-elections-ubs-
114011200205_1.html
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A FUTURISTIC STUDY OF E-BUSINESS MODEL
WITH REFERENCE TO ALL TRANSPORT INDIA PVT. LTD., DEOLA
DR. SUBHASH WADEKAR
Principal,
Hon. Balasaheb Jadhav Arts, Commerce and Science College,
Ale, Pune, India.
Abstract
Today is the world of changing era, with modern changes in trends, education,
technology and higher standard of living changing customer‟s need and preference, their
high expectations for new and improved products have enforced the companies to bring new,
modern and superior products in the market. For this every company must establish and
evaluate new products development ideas and strategies. For the same researcher was
inspired to study and analyze the e-Business online Model in transportation and factor that
attracts transport customers for this e–Business online model. The main focus of the study
was on Transportation Business, the model or Modes used of generating business. As
transporting is main importance in daily routine for any goods, human from one place to
another place Ensures that time needed for transporting should be minimum with least cost.
There are many people using the internet for all sort of any small work. Study was carried
out using gap analysis regarding current transportation method used for different modes with
new innovative ideas so as to keep pace with today‟s changing marketing environment. The
study is based on Secondary data and primary survey carried for Transporters in Deola
tahsil of Nashik district to Study the e-Business online model of All Transport India Pvt. ltd. It
was found that e-Business Transport model worked for the company and looking to explore
for other regions too.
Keywords: - E-Business, model, Transport, Road, Railway
1) INTRODUCTION
From the ancient Days, for Progress of
society there was an urge identified through
human sensitivity for mobility i.e. transports.
This ancient history of mobility or transport
is the history of civilization. A basic
infrastructure is a need for any country to
develop better momentum with modern and
efficient Transport. Proper, extensive and
efficient Road Transport is the main factors
for better history of any nation.
‗Transporters' perform one of the most
important functions for any nation, at
various stages of advanced civilization. In
which roads are similar to as veins and
arteries of any nation, goods & passenger
transported are compared to blood in
circulation.
Modes of Transport: Transportation is
generally divided into five modes-
1) Roads
2) Railways
3) Pipelines
4) Waterway
5) Airway
Importance of Transport: Transport is vast
mechanical in current scenario. The main
stream line of our economy is comprised
from with Transportation routes and
channels. They serve as a bridge to bring
producers and consumers of goods nearby.
The transport or logistics boost the
economic, social and cultural life. All
Transport India pvt ltd ( www.
alltransportindia.com) is an online transport
search service engine that helps to find
proper transit system quickly, conveniently
and cost effectively for fulfil all needs of
transporting and travelling .this service
facilitate all requirements of individual to
corporate to get common platform, thus ―the
way ‗comes to you. Visitor to the site get a
unique experiment through a systematically
search and comprehensive local and regional
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content. They studied that all people didn‘t
get proper transportation & travelling
system, and even lack of correct information,
people are losing money and time. So,
Shewale Brothers identified difficulties of
people and they got intuition of unique and
different Idea .So they launch solution by
―www. alltransportindia.com‖. Where the
people gets common platform to interact
with each other for purpose of transportation
and travelling. By doing so the company still
had some lacunas like
Total travelling (Transport) data was
not gathered.
Marketing was not enough to create
awareness of Model.
Proper information flow to customer
was not clear.
The researcher indentified the above
problems and did the study to find solution
for the problems.
2) OBJECTIVES OF THE STUDY
1. To understand the current E-business
model.
2. To find the awareness of E-business for
transport in deola.
3. To identify factors that attracts transport
for this E – business model.
3) METHODOLOGY
Exploratory research Design: It was
used to explore the facts and identify
solutions related to above problems. Primary
Data was collected by questionnaire and
secondary data through Newspapers.
Magazines, Text books, marketing reports of
the company, Internet.
DATA SOURCE: RTO office, travelling
agency, Transporting Company.
UNIVERSE:-
1) The data of universe RTO office
2) Travelling Agency
3) Transport company
FRAME:-The Frame of this project is to
―All Vehicle owner in DeolaTaluka.
SIZE: - The sampling size of data 40 vehicle
owner
METHOD: - Judgmental Sampling Method
is used to select the sample.
4) DATA ANALYSES
a) Do you know E- transport business
model?
Table No.1
Respondent Percentage
Yes 30 75%
NO 10 25%
Total 40 100%
Interpretation:-The 75 % people are
aware about E-Transportation business
model and 25 % are not.
b) How do you know about E- transport
business model?
Table No.2
Source Respondent Percentage
Newspaper 8 26%
Friends 10 32%
Banner &
Hoardings
5 16%
Internet 8 26%
Total 30 100%
Interpretation- 32% people are Aware about
E- transport business model through friends,
26% get the information through news
paper, Other 26% through Internet. So
Banners and Hoardings are not that Effective
as only 16% respondents.
c) Which type of transporting vehicle do
you have?
Table No.3
Respondent Percentage
Human
Careers
10 33%
Goods
Career
20 67%
Total 30 100%
Interpretation- 67% of respondents have
goods career while 33 % have human career
vehicles, so scope for Transportation
Business in goods career is more.
d) How many Transportation vehicles do
you have?
Table No.4
Vehicle Respondent Percentage
1-5 5 17%
5-10 15 50%
10-15 10 33%
Total 30 100%
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Interpretation- 50% of respondent have
transporting vehicle owned between 5-10
only 17% respondent have less than 5
vehicles. So, major respondents who are in
transportation business have more than 5
vehicles.
e) Maximum order you received from
below location?
Table No.5
Locations Percentage
Village 24%
City 28%
Local Areas 36%
Metro City 12%
Total 100%
Interpretation-36 % of respondent receives
maximum order from local areas, while 28
% receives from city, 24% from villages and
only 12% from Metro city. So it interprets
that maximum orders are from Known
nearby locations only.
f) Rank the mode of receiving order?
Table No.6
Order
Mode
Rank
Telephone 1
Friends &
relatives
2
Transport
Agency
3
Internet 4
Interpretation-The respondents rated the
mode of receiving order as telephone order
given 1st rank, Friends and relative 2
nd,
Transporting agency 3rd
, Internet 4th.
g) How many order do you receive in a
week?
Table No.7
Vehicle
Order
Respondent Percentage
1 5 17%
2 5 17%
3 10 33%
4 10 33%
Total 30 100%
Interpretation-33% of the respondents
receive 3 or 4 orders in a week in current
situation, while 17% receive 1 or 2 orders in
a week. On average 3 or 4 orders are
received in a week.
h) If you receive an order through E-
business then are you interested?
Table No.8
Respondent Percentage
Yes 25 83%
No 5 17%
Total 30 100%
Interpretation-83% respondents would be
happy if they receive order through E-
transport business model, while remaining
17% would not.
i) How many order do you are expect
through E- business model in a week?
Table No.9
Vehicle
Order
Respondent Percentage
3 4 16%
4 6 24%
5 7 28%
6 8 32%
Total 25 100%
Interpretation- 32% of the respondent
expect maximum 6 orders in a week through
the E-business , while 28% expect 5 orders,
24% expect 4 orders and remaining 16%
expect minimum 3 orders in a week. On an
average 5-6 orders in a week through the E-
Business Model.
j) Do you know any other company
having E-business transportation model?
Table No.10
Respondent Percentage
Yes 5 20%
No 20 80%
Total 25 100%
Interpretation-80 % of the respondents don‘t
know about any other company having E-
business transporting model, while 20% feel
they know other company providing the
same.
k) Do you want to be member of this
model?
Table No.11
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Respondent Percentage
Yes 20 80%
No 5 20%
Total 25 100%
Interpretation-80% of the respondent wants
to be member of E-business plan for
transportation business, while remaining
20% oppose the same.
l) Why would you like to Purchase this
model?
Table No.12
Respond
ent
Percent
age
Save
Time
9 48%
Save
Mon
ey
11 52%
Tota
l
20 100%
Interpretation- 52% of the respondents
would like to purchase the model for saving
money, while 48% for saving time. Saving
time and money are the reason respondent
want to purchase the E-Business Model
plans.
Existing 20 Customers after two Weeks:
m) Are you interested in renewal of this
model?
Table No.13
Respon
dent
Percent
age
Yes 15 75%
No 5 25%
Tot
al
20 100%
Interpretation-75% of the respondents are
happy to renew the E-business model, while
25% are not sure. Maximum Customers are
happy to renew the model.
n) Are you satisfied with no of orders
received through E-business model?
Table No.14
Source Respondent Percentage
Strongly
Agree
4 20%
Agree 6 20%
NIL 5 25%
Disagree 3 15%
Strongly
Disagree
2 10%
Total 20 100%
Interpretation-40% of the respondent
agree that they are satisfied with the E-
business model and its services, while 25%
fell changes or modification should be done
as the Disagree., while remaining 25% are
not sure that they disagree with the statement
of satisfaction about the E-Business model
and its plans.
5) FINDINGS
75% people are aware about E-transport
business model.
32% people are aware about E-transport
business model by friends recommends.
67% people prefer goods careers for
transporting vehicle.
From above only 36% people have
maximum order from local areas.
83% people are interested receive an
order through E-business model.
80% people are interested and purchased
this E-business model.
30% people are agree that no. of orders
received through E-business model.
6) CONCLUSION
The company are providing for the
fast services in the Deola District. This
company serves a E-commerce model which
emphasis by collecting and displaying the
details of registered vehicle owner. This
Online transport service acts as a search
engine for the customer which percolates the
data at the tips of finger. This result to
enhance the system quickly, conveniently,
transpired and most cost effectively. This
online service facilitates the requirements of
both individual and corporate customers in
single platform. The visitor‘s experiences
unique feel through this online transport
model for searching local and regional
transporters. The present model version
provides a good starting point for future
development.
7) SUGGESTIONS
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1. 25 % people unknown about E-transport
business model so that awareness of
internet by giving Advertisement,
Newspaper, TV.
2. Only 16% people are known about E-
business model through Banner&
Hording but whenever the awareness of
internet increased that time affect on E-
transport business model.
3. 33% people use Human careers but to
reduce human effort there can be need
for goods career so that upgraded
technology used instead of human career.
4. From the above data only 12% people
minimum order received from metro city
so that time company need to appointed
sales executive.
5. 17% people are not interested in E-
business so to increase and provide SMS,
online skim and attract the customer for
business.
6. 20 % people are not using E-transport
business model so Awareness about
model is needed like more order given,
save time, save money, not found to
customer.
7. 10% people are strongly disagree so that
disagree customer into agree so
providing offline facility, company
online application, online skim to so
converted the vehicle owner.
REFERENCES
Bibliography:
Books and articles:
1. C. R. Kothari, (2008), Research
Methodology, New Age International
Publishers, Delhi, pp 2-20, 31-52, 95-
112.
2. Philip Kotler and Kevin Lane Keller,
(2007), Marketing Management (12th
edition), Published by Dorling
Kindersley (India) Pvt. Ltd., licenses of
Pearson Education in South Asia, Delhi,
pp 395-400
3. Bright, D.A., Coedy, B., Dushenko,
W.T. & Reimer, K.J. 1994. Arsenic
transport in a watershed receiving gold
mine effluent near Yellowknife, Canada.
Total. Environ. 155, 237-252.
Research papers:
1. Blanke, J. and T. Chiesa. 2007. ―The
Travel Competitiveness Index: Assessing
Key Factors Driving the Sector‘s
Development.‖ In The Tourism
Competitiveness Report 2007:
Furthering the Process of Economic
Development. Geneva: World Economic.
2. ―The Tourism Competitiveness Index
2008: Measuring Key Elements Driving
the Sector‘s Development.‖ In The
Tourism Competitiveness Report 2008:
Balancing Economic Development and
Environmental Sustainability. Geneva:
World Economic Forum. 3–26.
3. Blanke, J., T. Chiesa, and E. Trujillo
Herrera. 2009. ―The Travelling
Competitiveness Index 2009: Measuring
Sectoral Drivers in a Downturn.‖ In The
Tourism Competitiveness Report 2009:
Managing in a Time of Turbulence.
Geneva: World Economic Forum.
Websites:
1. www.transporting company.com
2. www.google.com
3. www.alltransport india.com
4. Transportation from UCB Libraries Gov
Pubs
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
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IMPACT OF GOODS AND SERVICES TAX ON INDIAN ECONOMY
DR. DEEPAK K. SURVASE
Asst. Professor, Dept. of Commerce
S.B.B.alias Appasaheb Jedhe College,
Pune, Maharashtra.
ABSTRACT
The introduction of Goods and Services Tax (GST) would be a very significant step in
the field of indirect tax. The cascading or double taxation effects could be reduced by
combing many central and state taxes. Consumer‟s tax burden will approximately reduce to
25% to 30% after introduction of GST. After introduction of GST Indian products would
became more competitive in the domestic and international markets. This tax would instantly
encourage economic growth. GST with transparent feature will prove easier to administer. In
this paper I try to attempt to spot the concept of GST & its current status in India. Paper
gives information about GST. The study also aims to be familiar with the advantages and
challenges of GST in Indian scenario.
Keyword - Goods and services Tax, Gross domestic products, Budget, Development, Tax
1. INTRODUCTION
This large quantity of taxes at the
State and Central levels has brought about a
complex indirect tax structure in the nation
that is ridden with concealed expenses for
the trade and industry. Firstly, there is no
consistency of assessment rates and structure
crosswise over States. Also, there is falling
of charges because of 'tax on tax'. No credit
of excise duty and service tax paid at the
phase of manufacture is available to the
traders while paying the State level sales tax
or VAT, and vice-versa. Further, no credit of
State taxes paid in one State can be benefited
in different States. Due this tax on tax prices
of goods and services get unnaturally
inflated. The arrangement of GST would
stamp a reasonable take off from the plan of
dissemination of monetary forces conceived
in the Constitution. The proposed dual GST
conceives tax assessment of the same
assessable occasion, i.e., supply of products
and enterprises, at the same time by both the
Centre and the States. The credit of GST
paid on input at each phase of value addition
would be available for the discharge of GST
liability on the output, thereby ensuring GST
is charged only on the component of value
addition at each stage. Indian indirect tax
will become simpler after GST. It is
expected to decrease cost of creation and
inflation in the economy, accordingly
making the Indian trade and industry more
competitive, locally and additionally
globally. It is likewise expected that
arrangement of GST will encourage a typical
or consistent Indian market and contribute
essentially to the development of the
economy.
2. LITERATURE REVIEW
Kausalya’s Arthasastra: His works state
that the taxes are often perceived to be a
measure for raising resources for the
government. In the primitive barter
economies of the medieval period in Europe
and even in ancient India, the primary
objective of taxation was to raise resource
for the economy.
Mukhopadhyay Sukumar (2005): His
study reveals that Revenue growth is the
most important aspect by which to judge the
success of VAT in Haryana. The deemed
growth of revenue estimated by the
Commercial Tax Department of Haryana,
however, has not taken into account a
number of positive factors. As Haryana
implemented VAT only in 2003, one year is
too short a period to judge its efficiency
from a revenue point of view. The
conclusion is that the design of VAT
introduced in Haryana is unexceptional
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Nishitha Guptha (2014) in her study stated
that implementation of GST in the Indian
framework will lead to commercial benefits
which were untouched by the VAT system
and would essentially lead to economic
development.
Jaiprakash (2014) in his research study
mentioned that the GST at the Central and
the State level are expected to give more
relief to industry, trade, agriculture and
consumers through a more comprehensive
and wider coverage of input tax set-off and
service tax setoff, subsuming of several
taxes in the GST and phasing out of CST
Saravanan Venkadasalam (2014) has
analysed the post effect of the goods and
service tax (GST) on the national growth on
ASEAN States using Least Squares Dummy
Variable Model (LSDVM) in his research
paper. He stated that seven of the ten
ASEAN nations are already implementing
the GST. He also suggested that the
household final consumption expenditure
and general government consumption
expenditure are positively significantly
related to the gross domestic product as
required and support the economic theories.
But the effect
of the post GST differs in countries
3. OBJECTIVE OF STUDY –
To collect information of current tax system
and analysis of tax byGST
To study the concept of Goods and Services
Tax (GST) and its impact on Indian
economy.
To understand how GST will work inIndia.
To know the benefits of GST in India conte
4. RESEARCH METHODOLOGY
The study is based on Secondary data
collected from various referred books,
National & international Journals,
government reports, publications from
various websites which focused on various
aspects of Goods and Service tax.
5. CONCEPT: -
GST is an indirect tax which will
include almost all the indirect taxes of
central government and states governments
into a uniform or whole tax. As the name
suggests it will be levied on both goods and
services at all the stages of value addition. It
has dual model including central goods and
service tax (CGST) and states goods and
service tax (SGST). CGST will subsume
indirect taxes like central excise duty, central
sales tax, service tax, special additional duty
on customs; counter veiling duties whereas
indirect taxes of state governments like state
vat, purchase tax, luxury tax, octroi, tax on
lottery and gambling will be replaced by
SGST. Integrated goods and servicetax
(IGST) also called interstate goods and
service tax is also a component of GST. It is
not an additional tax but it is a system to
examine the interstate transactions of goods
and services and to further assure that the tax
should be received by the importer state as
GST is a destination based tax.
6. STRUCTURE OF GST
The proposed GST comprises:
Central GST(CGST) which will be levied by
Central Government
State GST(SGST) which will be levied by
state government
Integrated GST (IGST) which will be levied
by Central Government on inter-State supply
of goods and services. This will be CGST
plus SGST
7. Impact of Goods and Services Tax on
Indian Economy
7.1 Positive impacts on the economy:
Implementation of a single National GST
will have major beneficial impact on all
stake holders. The key highlight of such
impact is given below:
I. Eliminates cascading effect & barrier
free tax structure:
GST will eliminate cascading [tax on
tax/ compounding tax] impact on the
production and distribution cost of goods
and services. This reduced cost of goods and
service leading to accelerated GDP growth.
GST without tax barriers will leads to
economies of scale in manufacturing
industry and reduces the supply chain cost.
II. Expected to reduce the production
cost:
GST is expected to reduce the
production cost by 15% to 20% in many of
the products in view of full input tax credit
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which will have favourable impact on the
prices of product.
III. Expected to increase the tax revenue:
GST will widen the tax base and
improve the tax compliance higher tax: GDP
ratio. The Tax: GDP ratio is expected to
increase by 2% as per FRBM report. This
works out to rupees 70,000 to 80000 crores
of additional annual revenue to the central
and state governments.
IV. Leads to sustainable growth in the
economy:
GST will remove the tax distortions
from the economy. This will lead to
sustainable higher growth based on
competitive strength of the country. Simple
tax system will attract more productive
investment for growth.
V. Will lead to optimization and
comparative cost advantage:
GST will eliminate the Inter State tax
by which it will leads to optimization of
physical facilities to the extent of full
capacity. If the manufacturing is done at full
capacity industry will be benefited by
comparative cost advantage.
VI. Increase in the GDP and standard of
living:
Since it is expected that with the
implementation of GST the price level will
reduced in the economy, it will result in
increase in the consumption level and
growth in GDP of the economy. According
to study by NCAER (National Council for
Applied Economics and Research) complete
implementation of GST could lift GDP
growth by 0.9-1.7%.
VII. Positive effects on export and BOP
level:
In proposed GST the exporter will
get the full tax credit, the export units will be
able to quote better price for their products
and services in comparison with present
scenario. Increased export will ultimately
have positive effect on the BOP of the
country.
7.2 NEGATIVE IMPACT OF GST:
The proposed GST may lead to following
negative impact on the stake holders:
I. Negative effect on the real estate
industry: AsperthestudyundertakenbytheCurtinUni
versityofTechnology,Perthin
2000,GSTwouldnegativelyimpacttherealestat
emarketasitwouldaddupto
8%tothecostofnewhomesandreducedemandb
yabout12%.
II. Emergence of transfer pricing issues:
As the GST considers all the transaction
fort taxation purpose, this procedure will
increase the price of the transfer from one
department to anotherforfurther process.
III. Negative effect on working capital:
As the firms are supposed to make the
payment of the tax one very transfer the
companies working capital requirement will
shoot supply proportionaltothe purchase of
inputs for the value addition.
Conclusion:
By the above discussions one can reach
following conclusion:
1. The macro economic impact of GST
is significant in terms of grow with
effects, price effects, current account
effects and the effect on the budget
balance.
2. In developing
3. open economy with growing service
sector ,a change in the tax mix fro
mincometoconsumption-
basedtaxesislikelytoprovidea fruitful
source of revenue.
4. The proposed structure will simplify
the procedure which will end up with
equal opportunity for all the markets
and in other hand will eadsr educed
tax evasion.
REFERENCES: -
1. http://en.wikipedia.org/wiki/Goods_and_
Services_Tax_(India)
2. http://economictimes.indiatimes.com/top
ic/GST
3. A Primer on Goods and Services
Tax in India, Centre for Budget
and Gover nance Accountability,
new delhi,2011
4. Beri
Yogita,(2012),―ProblemsandProspect
sofGoodsandServiceTax(GST)inIndi
a‖,Economic affairs,2011.
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
5. Ca Rajkumar S Adukia, A Study on
Proposed Goods and Services Tax
[Gst] Framework in India.
6. Dr. R. Vasantha gopal (2011), ―GST
in India: A Big Leap in the Indirect
Taxation System‖, International
Journal of Trade, Economics and
Finance, Vol. 2, No. 2, April2011.
7. Empowered Committee of Finance
Ministers (2009). First Discussion
Paper on Goods and
ServicesTaxinIndia,the
EmpoweredCommitteeofStateFinanc
eMinisters,NewDelhi.
8. Girish Garg, (2014), ―Basic Concepts
and Features of Good and Service
Tax inIndia‖.
9. Goods and Ser vices Tax (GST) -
A step forward (2013) available at
http://www.taxmanagementindia.co
m
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BLIND SPOT AND MARKET RISK
DR. SAROJ HIREMATH
S.P.College, Pune, Maharashtra.
ABSTRACT
The premise of the study is to generate the awareness amongst the professional
bodies the significance of digging deep into any failures and the importance going deep into
analyzing any traits of the competitive blind spot that might safe guard the company's risk.
The paper also deals with strategizing the policies with respect to the competitive blind spots
and the risks associated with it.
INTRODUCTION The year 1948 witnessed a
technological renaissance. Polaroid was
founded by Edwin Land who introduced
the world to the instant camera. Hence the
instant photography became the core
business for Polaroid. In 1976 Kodak
tried to break into the market of
photography. However it failed. The only
substitute for the instant photography was
the conventional photography that
required a long time to get processed.
Thus Polaroid had a competitive edge in
the market. But the business environment
sent a signal of discomfort when the
technology of the traditional photography
got advanced to a point where the
processing time reduced to just an hour. It
was a reasonable trade-off for the
customers. The year 1980 finally became
the era of cheap disposable cameras that
was the best alternative for the traditional
and expensive cameras and the final blow
was from the digital cameras. Polaroid
suffered from a serious jerk in 1985. It
invested millions into the instant motion
picture system project, Panavision and
Polaroid lost out to video camera which
was clearly an alternative to Polaroid's
technology. An executive at Polaroid told
the press" everybody but Land knew video
was on the way". This is quite typical of
strong, charismatic, and autocratic
technologists who became leaders in the
industry. Land stepped down from his
authoritative position in the company. But
the syndrome of overlooking the growing
change in the market persisted over 15
years till the company filled its petition for
bankruptcy. The Post-Land -Leadership
just did not want to see the changes
clearly. Had the early warning of changing
technology was caught on the Polaroid
radar then the company would have had
some different destiny to cherish. Hence
the biggest dangers to any company are the
ones that cannot be predicted.
To understand these threats one
needs to have a strong anticipating
opportunity that requires high end
peripheral vision. Past may not be the
most reliable predictor of the future. But
it can surely point out the blind spots in
the respective company or the industry.
Failing to learn the lessons will lead to
slow opportunities and threat detection
which bluntly gives little-to-no strategic
value to the company's efforts to achieve
competitive advantage. This overlooking
of threats and opportunities nearing by is
called Blind spots. The result of any Blind
Spot is an inability to contribute insights
that help senior management steer the
company to attain and sustain competitive
advantage, which is the only justification
for accruing the overhead cost of a CI
function and staff. The result is a CI unit
that has limited its ability to add strategic
value. What Polaroid suffered for the 15
years since 1985 that led to the
bankruptcy, was the blind spot. Had this
blind spot was been figured out by Land
or any of his successors, then Polaroid
would have survived the market warfare.
This paper hence identifies and explores
the blind spot effects in the present
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economy. The marketers never pay much
heed to the past tends. They always seek
for the strategies to get the present work.
They rarely look back. They are busier
keeping up with the current trends. They
are more into what happened rather than
why it happened. The study thus focuses
on the loopholes while making the
strategies especially with respect to the
competitive intelligence blind spots.
Objectives of the Study 1) To explore the risks with regards to
the blind spots
2) To uncover the greatest blunders
occurred down the line of corporate
history.
3) Bringing out a solution to detect the
blind spot
4) Associating marketing strategy with
blind spot detection.
Research methodology The study is based on secondary
data which are qualitative in nature. The
source of the data used has their roots in
several books and articles. The study also
considered the latest research papers put
up in several websites.
Data analysis and interpretation:
The study mainly focuses on the
secondary data and the interpretation is
categorized as the following five factors,
viz., A, B, C, D, and E.
A) Defining Blind spots "The biggest blunder we commit in
a corporate scenario is not identifying the
risks that are approaching our way and
anticipating it as opportunities".
Precisely Blind-Spots refer to the
unidentified risks that lie in the industry,
which is bound to happen and hamper the
process of the organisation. Competitive
blind spots refer to the firm's poor analysis
of its competitor or underestimation of the
competitor moves and strategies or
misjudging the motion of the competitor
and consequently paying a huge price for
weakening itself in seeking new
opportunities and horizons.
"It's been always said, Leaders seek
Opportunities at the face of the threat".
As a result of Global intensification
the markets have become more competitive
than it was ever. The survival had become
tougher, so in order to stay alive in the
market, one has to hold the competitive
advantage over the other.
And to hold an advantage over the
other competitors, each and every move,
strategy, innovations and technology of
the other competitors should be carefully
monitored. In short - The Survival Of the
Fittest has become the notion of today's
businesses.
In spite of this prevailing
importance, cases shows that not all
corporate do have a competitive analysis
on their competitors profile, and have
serious blind spots about competitors
intentions, capabilities and possible
reactions.
The main aspects and elements
while doing a competitive analysis in
examining the blind spots could be
referred from the Industry, Competitors
and Customers.
The changes that's taking place in
the industry and new trends that keep on
rocketing the market has to be analyzed.
Further the emerging technologies which
are brought in by the close competitors
and coping up with the new technologies
that makes radical changes in the industry
has to be keenly followed in order to
outlast the competitors. If not, this leads to
blind spots in competitive analysis.
Customers
In a rapidly changing day to day
environment the needs, wants and the
preferences of the customers are also
changing each day. Not simply, it was
said that the customers are the kings of the
market. So the firm has to keep itself
updated to the new emerging needs and
wants of the customers. Identifying the
potential customers and catering to their
buying patterns and behaviors had been
become more important, in avoiding the
blind spots.
Competitors
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Significant blind spots occur in
this particular juncture, as the firm has to
very careful in analyzing its competitors,
not sticking to only the well known
companies and brands is vital, as there
might be potential threat from a new
entrant and in this global era, companies
shouldn't limit themselves to a regional
competitor, as there might be national,
foreign invasions sooner or later.
How important it is to take a
strategic move during economic
slowdowns, is as important in analyzing
the competitor during that particular
depression period. Competitors may try to
seek new target segment or roll down new
line extension or diversify their markets
and operations.
Firms that do not consider these
issues in competitive analysis will fall a
prey to competitive blind spots. B) Blind
spot Detection and Its Barrers to Adding
Strategic Values
The industry map reveals that the
industry landscape is changing at a rapid
pace. Every day brings in a brave new
world in the technical and business arena.
Concerned entities in the respective
world, if they do not bother to follow up
the constant change are bound to bring up
the rear. Market is now very much
dynamic and exponential. A constant
follow up with regards to the constant
change in the environmental landscape is
very crucial for the sustainability of any
concerned entity working within the
market. The solution to the matter dealt
with has to be addressed with sheer
importance. The industry map reveals
that the industry landscape is changing at
a rapid pace. Every day brings in a brave
new world in the technical and business
arena. Concerned entities in the respective
world, if they do not bother to follow up
the constant change are bound to bring up
the rear. Market is now very much
dynamic and exponential. A constant
follow up with regards to the constant
change in the environmental landscape is
very crucial for the sustainability of any
concerned entity working within the
market. The solution to the matter dealt
with has to be addressed with sheer
importance.
Having done the scanning of the
environment of the market, risks need to
be mapped and rated as per the interest of
the organization. To define with clarity,
anything that causes a hindrance to the
vision, mission and objective an
organization or a firm is called a risk.
Hence the future threat perceived, should
be rated on a desired scale as per the
concerned convenience.
C) Blind spot and Risk Detection Globalization has erased the
concept of territory in the world of trade
and commerce. Earlier days witnessed
the dictators as the influential
individual with the supreme military
power. Recent years witness the
economic superpower as the dictator of
the world. In that way, things have
changed from head to toe. But the
aggression has the same intensity and
the lust for the power is still the same.
Hence the bottom line of every
organization is money and thus the
power play has begun the day people
understood the significance of economic
superpower. The global market is
interconnected by regulations and trade.
The risk detection in the excessive
complex market stands a chance to get
extremely vulnerable. The business
environment needs a constant
monitoring as the landscape changes
very rapidly. The rapid changes in the
landscape are just the outcome of the
exponential trend of the market
dynamics. But the bottom line of risk
detection is the constant environment
scanning. No matter how much critical
or how much innovative risk detection
model is used, has not the
environmental scanning been done on a
regular basis, the detection cannot be
made. Detection and analyzing tools
will come and will evolve into finer
tools and then will also get obsolete
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with the emergence of new tool and
technique. But if the scanning is not
done properly, actionable intelligence
will not get generated and hence risk
will not get detected. Hence, no matter
how complex a structure the global
economy has, which no wonder will
evolve more into a more complicated
structure, but the scanning of
environment to get a proper idea is of
utmost importance. To gauge the risk
and its significance, an organization
needs the daily updates of every form
regarding the micro and macro
environment of the economy. Micro
includes everything with regards to the
organization and macro includes
everything with regards to its
competitors, market, global changes,
technical evolution-in short, everything
to landscape the industry the
organization is playing or wants to play-
However, in order to mitigate the risk,
one will have to understand the kinds of
risks that he may have to be come in
terms with in the market while
undergoing any tradeoffs. They are thus
as follows:
1) Strategic risk
2) Compliance risk
3) Financial risk
4) Operational risk
5) Data protection risk
6) Environmental risk
7) Employee risk
8) Political risk
9) Commercial risk
10) Reputational risk
Strategic risks includes the
threats arising out of mergers and
acquisitions, changes in demand among
the customers, changes in the industry
and the changes regarding the
technology. The compliance risk
involves the legal issues that need to be
addressed. Financial risks includes the
issues regarding the daily examination of
proper cash flow in and out of the
organization that concerns the credit and
debit flow of money, insurance coverage
of large and doubtful debts and the bank
interests. Moreover the financial risks
cover the exchange rate risks and the
export risks. The exchange risks
management finds solutions to the risk in
hedging. Hedging can be done in two ways:
a) Forward foreign exchange
contracts that is mainly handled by
the respective bank of the organization.
b) Buying currency options
The operation risks includes the
risks regarding the proper talent
management, proper supply chain
management transportation management,
accounting controls, information
technology management regulations and
the board composition of the organization
themselves. At the end, goodwill makes
the organization a going concern. Thus
reputation holds such importance to a
firm that it any harm to it can bring down
a company to the stage from where it
began its journey.
Any organization should have a
department who will just be entrusted
with the job of data security and
collection. In other words, the intelligence
unit of every organization should be
entrusted with the environment scanning
and the risk detection. Every department
should have their own monitoring sub
department. But the entire sub department
should be directly supervised by the
planning department.
D)Vision in Accordance to the Risk
Detection- Strategic Inflection Points
May you, live in Interesting Times.
-Chinese Curse
Strategic Inflection Point - a new
term coined by Andy Groove, which states
it as a time in the life of business or project
when its fundamentals are changing
significantly. Often point is a misnomer,
and it's actually a long, sometimes painful
period of change.
Strategic Inflection Point could
also be the subtle- in a way hard to detect
changes that are happening in the industry
and in the environment. The wheels roll in
the form of emerging new technologies,
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entry of new competitor (unrelated
diversification), changing patterns of
consumer behavior and buying patterns.
"IT'S NOT A SIN TO BE
DEFEATED, BUT TO BE SURPRISED"!
Surprise! When everything looks
and feels normal to you, suddenly some
changes takes place which involves you
seriously.
Strategic Inflection Point may bring
about full scale changes in the way the
business is being conducted.
And if necessary reactions are not
made to these changes in the environment,
then firms would end up paying dearly for
that. Thus strategic inflection point could
be deadly.
In short strategic inflection point
could be fundamental changes in the
business. It has become common and
imperative in today's world that firms
should adopt to the each and every
changes that occur in the environment be
it micro or macro. Else it's obvious that
firms would be easily sunk in a sea, which
is boiling with cut throat competition.
E) Scenario Planning As a Tool for
Mitigation
Practically, the market landscape
is supported by the globalization in itself.
The words that govern all the activities
inside the market are given by
"deterritorialisation" and
"supraterritorialisation" where each market
is interlinked and interconnected with each
other. But each market has its own rule
while in the game inside the ring. For
instance, two players playing a game of
chess and each of them have their own rule
that may contradict each other's interest
but they certainly protects their own
respective interest in order to maintain
their strengths and sustainability. The
intricacies are very crucial to play with as
it is very much likely to invite the
vulnerabilities from the competitors while
playing in the market. The market being
dynamic and restricted with unlimited
flow of products and services undergoes a
very high-end competition. Players in the
market are merciless and aggressive.
Hence it is very critical of every entity in
the market to do proper planning to
identify and assess the risks, then control
them and finally mitigate them. This is
called the risk management process. While
undertaking the process of risk
identification, business environment should
be given the maximum emphasis. It leads
to the assessment of the likelihood of the
occurrence of any event in near future
that holds the key to the scenario
planning. Scenario planning is nothing but
assessing the current picture of the
environment, analyzing the future risks
that the business of any particular nature is
vulnerable to and then identifying the
possible actions that can be taken in
response to the threats. The planning
should have a follow up with the systems
in place to deal with the predicted perils.
Eventually the constant monitoring should
be done to keep a check on the
effectiveness of the strategy planned to
mitigate the threats.
Conclusion
Though past is considered as dead
and effete, it can certainly be a better
predictor for the future. We can always
learn from the past citing, the blind-spots
in the company or in the industry. Those
who fail to learn from these examples will
face threat at every corridor of their
operations and will not be able to foresee
the ample opportunities that lie ahead of
them.Blind spots occur when firms do not
react to the changing business
environment, the emerging technologies,
buyer's buying patterns and shifts in
buyer's attitude and most abruptly not
analyzing the potential threats from the
competitors. Analyzing the competitors
and their strategic moves is not only
important to stay ahead of the competition
but also to make strategic decision making.
When companies fail to reflect to these
threats and changes that is where it leads
the firm to potential competitive blind
spots. When properly analyzed and
focused, these blind spots could always be
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used to seize or gain a competitive
advantage over the other firms and it helps
in deciding the strategic moves to be
competitive!
References
1. http: / /en.wikipedia.org/wiki/Risk
management
2. http://www.exsecutus.com/haughwout
/2010/03/risk-management-is-more-
than-just-risk-rnitigation
3. http: //www. mind tools.
com/pages/article/newTMC_07.htm
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IMPACT OF REMITTANCE ON ECONOMIC GROWTH AND POVERTY
ALLEVIATION IN NEPAL
NAR BAHADUR BISTA
Principal, Uniglobe College,
Pokhara University, Kathmandu,
Nepal
YEGYA BAHADUR K. C.
Research Scholor, Uniglobe
College, Pokhara University,
Kathmandu, Nepal
Abstract
This study examines the impact of remittance on economic growth and poverty
alleviation in Nepal. Gross domestic product and poverty alleviation are the dependent
variables. Remittance, broad money supply, foreign aid, industrial production, inflation,
foreign direct investment, per capita income, consumption, unemployment rate and literacy
rate are the independent variables. This study is based on secondary sources of data that are
collected from1995/96 to 2014/15, leading to a total of 20 observations. The data are
collected from Economic Survey, Monetary Policy and different reports published by NRB,
reports published by World Bank, and different issues and reports published by Ministry of
Finance. The regression models are estimated to test the significance and importance of
remittance on economic growth and poverty alleviation in Nepal.
The study shows that there is positive relationship between gross domestic product
and total remittance inflow. It indicates that increase in total remittance inflow leads to
increase in gross domestic product. Similarly, gross domestic product is positively correlated
to broad money supply. It indicates that increase in broad money supply leads to increase in
gross domestic product. Likewise, there is positive relationship between gross domestic
product and foreign aid. It indicates that higher the foreign aid, higher would be the gross
domestic product. Likewise, the gross domestic product is positively correlated to industrial
production. It indicates that higher the industrial production, higher would be the gross
domestic product. The study also shows that gross domestic product is positively correlated
to inflation. Similarly, the result shows that poverty alleviation is positively correlated to
total remittance inflow. It indicates that increase in total remittance inflow leads to increase
in poverty alleviation. Likewise, poverty alleviation is positively correlated to per capita
income. It indicates that higher the per capita income, higher would be the percentage of
poverty alleviation. The regression results show that the beta coefficients for remittance and
broad money supply are positive with gross domestic product. Similarly, the beta coefficients
for per capita income and literacy rate are positive with poverty alleviation. The study
concludes that remittance has significant impact of remittance on economic growth and
poverty alleviation in Nepal.
Keywords: Gross domestic product, poverty alleviation, remittance inflow, broad money
supply, foreign aid, industrial production, inflation.
1. Introduction
Remittance is a transfer of money by
foreign worker to his or her home country.
Remittance can also be referred as monetary
payment transferred by a customer to a
business from one place to another
(Mafruhah et al., 2012). In the worldwide
economy, remittances represent one of the
major international flows of financial
resources. Worker remittances constitute an
increasingly important mechanism for the
transfer of resources from developed to
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developing countries, and remittances are the
second-largest source, behind foreign direct
investment, of external funding for
developing countries. Sometimes the flows
of remittances can exceed the flows of
foreign direct investment (Shera & Meyer,
2013).
Inflows of remittances increase the
economic growth and reduce the poverty by
stimulating the income of the recipient
country, reducing credit constraints,
accelerating investment and enhancing
human development through financing better
education and health (Jongwanich (2007);
Gupta et al.(2009). However, Chami et al.
(2005) found that remittances have negative
impacts on economic growth of recipient
country because a significant flow of
remittances reduce labor force participation
and work efforts which lowers output. Thus,
the impact of remittances on economic
growth and development of recipient country
has been controversial.
According to ArefAssaf (2015), there
is a positive effect of remittances on GDP.
On the other hand the effects of other
traditional sources of economic growth, such
as gross fixed capital formation showed that
there is a positive effect on GDP , a negative
effect of foreign direct investment on GDP,
while no significant effect of labor force on
GDP. Similarly, Faini (2002) argued that
remittances overcome capital market
imperfections and allow migrant households
to accumulate positive assets.
Glytsos (1993) examined the impact
of remittances on output using data from
1969 to 1998 for Egypt, Greece, Jordan,
Morocco, and Portugal. For Egypt, Jordan,
and Morocco the growth-generating capacity
of rising remittances characteristic is smaller
than the growth-destroying capacity of
falling remittances. Therefore, the large
fluctuations in the real value of remittances
contribute to large fluctuations of output
growth and cause instability in the
economies concerned. Kaufmann et al.
(2004) found a robust positive relationship
between growth and gross capital formation,
as well as between growth and some of the
institutional variables. The study also found
some evidence of a positive relationship
between growth and total remittances.
Similarly, Azam & Khan (2011) found that
worker remittance has significant and
positive effects on economic growth.
Javidet al. (2012) investigated the
importance of remittances inflow and its
implication for economic growth and
poverty reduction in Pakistan. By using
ARDL approach, the study analyzed the
impact of remittances inflow on economic
growth and poverty in Pakistan for the
period 1973-2010. The empirical evidence
showed that remittances effect economic
growth positively and significantly.
Furthermore, the study also found that
remittances have a strong and statistically
significant impact on poverty reduction.
Similarly, Giuliano (2008) found that
remittances boost growth in countries with
less developed financial system as it provide
an alternative way to finance investment and
reduce liquidity constraints. Workers‘
remittances also play an important role in
human capital investment in the recipient
country through relaxing resource
constraints. Rajan &Subramanian (2005)
found a robust and significant positive effect
of remittance on long-term growth.
Jongwanich (2007) examined the
impact of workers‘ remittances on growth
and poverty in Asia-Pacific developing
countries. The empirical evidence showed
that remittances have a significant impact on
poverty reduction and trivial impact on
growth. Similarly, Burgess and Vikram
(2005) examined the different channels
through which remittances can affect
economic activity. The study does not
clearly support the short term stabilizing
effect on consumption, however the longer
term economic effect of such flows seems to
be ambiguous. Catrinescu et al. (2009)
explored that remittances exert a weak
positive impact on long term
macroeconomic growth. Furthermore, the
study also supported the idea that
development impact of remittance enhances
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in the presence of sound macroeconomic
policies and institution.
Fayissa and Nsiah (2010) argued that
remittances enhance economic growth in
countries where financial systems are not
very strong. Iqbal and Sattar (2005) showed
that real GDP growth is positively correlated
to workers‘ remittances during 1972-73 to
2002-03. The study also revealed that
workers‘ remittances emerged to be the third
important source of capital for economic
growth in Pakistan. Likewise, El-Sakka&
McNabb (2002) examined the role of
remittances and financial development on
economic growth in a panel of 36 countries
in Saharan Africa over the period of 1980-
2009. The study found that remittances
appear to be an important source of growth
for these countries in Africa during the
period under study. Jawaid et al. (2012)
revealed a positive and significant
relationship between workers‘ remittances
and economic growth. The study showed
that the workers‘ remittances are more
contributing in high income countries as
compared to low and middle income
countries.
According to Ramirez and Sharma
(2008), there is a positive association
between workers‘ remittances and economic
growth. Similarly, Imai et al. (2014) found a
positive relationship between workers‘
remittances and economic growth but the
volatility of workers‘ remittances was found
harmful for economic growth in 24 Asian
and Pacific countries. Tehseen & Raza
(2012) argued that workers‘ remittances also
create over dependency on external economy
or income that‘s creating voluntary
unemployment. Likewise, Waheed and
Aleem (2008) found that worker remittances
are only beneficial in short run. In long run,
the policy makers should focus on export
earning instead of workers‘ remittances as a
source of foreign exchange earnings for
continues and stable growth. Leon and
Piracha (2004) suggested that international
migration/remittances paralyze countries
making them dependent on remittances.
Reliance on remittances distorts
development and creates inequalities and
disparities among the people within the
country. Similarly, Sofranko and Idris
(1999) concluded that workers‘ remittances
fail to create sufficient savings required for
rapid economic growth because remittances
are mainly used for consumption not for
investment.
Similarly, Brown and Ahlburg
(1997) argued that remittance undermine
productivity and growth in low-income
countries because they are readily spent on
consumption likely to be dominated by
foreign goods than on productive
investments. Paul and Das (2011) found a
long run positive relationship between
remittance and GDP, but there is no
evidence on remittance-lead growth in the
short-run. On the other hand, Maitur et al.
(2006) showed that remittances seem to have
significant and ambiguous effect on
Bangladesh's GDP. Rodrick (2008) provided
evidence that a rise in remittance inflow
leads to an underestimation of long run
economic growth through the overvaluation
of real exchange rate which potentially cause
an inflationary pressure.
Adams and Page (2005) used the data
of 71 developing countries to assess the
relationship of remittances with growth,
inequality and poverty. The study concluded
that remittances significantly reduce the
level, depth and severity of poverty and
increase the economic growth of the
developing world. Lucas (2005) argued that
remittances probably contributed in a
significant way to economic growth and
poverty alleviation process in case of
Pakistan. Similarly, Nsiah & Fayissa (2010)
examined the macroeconomic impact of
remittances and some control variables such
as openness of the economy, capital/labor
ratio, and economic freedom on the
economic growth of African, Asian, and
Latin American-Caribbean countries. The
study found that remittances, openness of
the economy, and capital labor ratio have
positive and significant effect on economic
growth for all regions as a group and in
each of the three in study. Inflow of
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remittances affects economic growth
positively by reducing current account
deficit, improving the balance of payment
position and reducing dependence on
external borrowing (Iqbal and Sttar, 2005).
In Nepalese context, many studies have
attempted to address the impact of
remittance on economic growth and poverty
alleviation. Pradhan et al. (2008) found that
remittance has a significant and positive
impact on growth. Similarly, Gaudel (2006)
found that remittance income and grants
appear to be the most relevant variables to
raise nominal GDP in Nepal. Pension and
other items have also significant effect on
increasing nominal GDP in Nepal. Thagunna
and Acharya (2013) showed that
consumption has significant contribution to
the Nepalese economy at the present.
According to Pant (2008), remittance
is utilized for consumption, purchasing
houses or other investments which produce
positive effect on the economy by
stimulating demand for other goods and
services. The study also showed significant
decline in receipts from remittance could
disturb the structure of the economy from
the macro level.
The above discussion reveals that
there is no consistency in the findings of
various studies concerning the impact of
remittance on economic growth and poverty
alleviation.
The major purpose of this study is to
examine the impact of remittance on
economic growth and poverty alleviation in
Nepal. Specifically, it examines the effect of
remittance inflow, broad money supply,
foreign aid, industrial production, inflation,
unemployment rate, foreign direct
investment, per capita income, consumption
and literacy rate on economic growth and
poverty alleviation in Nepal.
The remainder of this study is organized
as follows: Section two describes the
sample, data and methodology. Section three
presents the empirical results and the final
section draw conclusions and discuss the
implications of the study findings.
2. Methodological aspects The study is based on the secondary
data, which were gathered from 1995/96 to
2014/15, leading to a total of 20
observations. The main sources of data are
Economic Survey, Monetary Policy and
different reports published by NRB, reports
published by World Bank, and different
issues and reports published by Ministry of
Finance. Table 1 shows the list of variables
selected for the study along with study
period and number of the observations.
Table 1: Number of macroeconomic variables selected for the study along with the
study period and number of observations
S.N. Variables Study period Observation
1 Gross domestic product 1995/96-2014/15 20
2 Poverty alleviation 1995/96-2014/15 20
3 Total remittances 1995/96-2014/15 20
4 Broad money supply (M2) 1995/96-2014/15 20
5 Foreign aid 1995/96-2014/15 20
6 Industrial production 1995/96-2014/15 20
7 Inflation 1995/96-2014/15 20
8 Foreign direct investment 1995/96-2014/15 20
9 Per capita income 1995/96-2014/15 20
10 Consumption 1995/96-2014/15 20
11 Unemployment rate 1995/96-2014/15 20
12 Literacy rate 1995/96-2014/15 20
Total observations 20
Thus, the study is based on 20 observations.
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The model
The model estimated in this study
assumes that the economic growth and
poverty alleviation depend on various macro
economic variables. The independent
variables considered in this study are
remittance inflow, broad money supply,
foreign aid, industrial production, inflation,
unemployment rate, foreign direct
investment, per capita income, consumption
and literacy rate. Therefore, the model takes
the following forms:
Economic growth=ƒ (remittance
inflow, broad money supply, foreign aid,
industrial production, inflation,
unemployment rate and foreign direct
investment).
Poverty alleviation=ƒ (remittance
inflow, per capita income, consumption and
literacy rate).
More specifically, the given model
has been segmented into following models:
Model I:
GDPit= β0 + β1 REMit + β2MSit + β3FAit +
β4IPit+β5INFit +β6FDIit+GDPt-1+ uit
Model II:
PA it = β0 + β1REMit + β2PCIit + β3CONit +
β4URit + β5LRit + uit
Where,
GDP= Gross domestic product is the real
GDP of the country, in Billion Rupees.
REM= Remittance is defined as earnings
from foreign employment, in Billion Rupees.
CON= Consumption is defined as resources
used by households, in Billion Rupees.
FDI= Foreign direct investment is defined as
net inflow of investment from abroad, in
Billion Rupees.
MS=Broad money supply is defined as total
money circulation in market plus demand
deposit, in Billion Rupees.
FA= Foreign aid is the goods, capital or
services received by a country from abroad,
in Billion Rupees.
IP= Industrial production is the total
industrial production of the country, in
Billion Rupees.
INF= Inflation is the continuous increase in
general price of goods and services in the
economy, in percentage.
PCI= Per capita income is the national
income divided by the total population of the
country in a given year.
PA= Poverty alleviation is the population
not living below poverty line, in percentage.
UR=Unemployment rate is the percentage of
unemployed population in the country, in
percentage.
LR= Literacy rate is the percentage of
literate population in the country, in
percentage.
Remittance
A remittance is a transfer of money
by a foreign worker to his or her home
country or simply sending amount from one
country to another. Ivakhnyuk (2006) found
that workers‘ remittances which are closely
related to migration have a positive impact
on economic development. Similarly, the
study also revealed that increase in
remittance leads to alleviation of poverty. In
addition, Pradhan et al. (2008) found that
remittances have a positive impact on
economic growth in a sample of 39
developing countries. Based on it, the study
develops the following hypotheses.
H1: There is a positive relationship between
remittance and gross domestic product.
H2: There is a positive relationship between
remittance and poverty alleviation.
Money supply
Money supply is the total amount
of monetary assets available in
an economy at a specific time. An increase
in the supply of money typically lowers
interest rates, which in turns generates more
investment and puts more money in the
hands of consumers (Nwannebuike, 2015).
Kar and Pentcost (2000) suggested that the
money supply was taken as a leading
indicator for the economic growth. Islamet
al. (2004) revealed a positive relationship
between money supply and economic
growth. Based on it, this study develops the
following hypothesis:
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H3: There is a positive relationship between
money supply and gross domestic product.
Foreign aid
Foreign aid refers to the assistance
provided by one nation to another. Foreign
aid also refers to the transfer of goods,
capital or services from an international
organization or a country to offer some
benefits or help to the receipt country.
Gomanee et al. (2005) found that foreign aid
has a significant positive effect on economic
growth. Similarly, Dowling and Hiemenz
(1982) assessed the effect of aid on
economic growth in Asia. The study found
that aid has positive and significant effect on
economic growth. Similarly Karras (2006)
found the positive correlation between
foreign aid and growth in per capita GDP.
This study concluded that the effect of
foreign aid on economic growth is positive,
permanent and statistically significant.
Based on it, the study develops the following
hypothesis.
H4: There is a positive relationship between
foreign aid and gross domestic product.
Industrial production
Industrial production is a measure of
output of the industrial sector of the
economy. The industrial sector includes
manufacturing, mining, and utilities.
Aurangzeb and Ul-Haq (2012) found that
industrial production contributes to
economic growth significantly and there is
positive relationship of gross domestic
product with industrial production.
Similarly, Kibriya et al. (2014) found that
industrial production is an important source
of increasing economic growth. Based on it,
the study develops the following hypothesis.
H5: There is a positive relationship between
industrial production and gross domestic
product.
Inflation
Inflation reflects the continuous
increase in general price of good and service
in the economy. Fischer (1993) showed that
inflation and growth are negatively related.
More specifically, the study argued that the
growth, investments and productivity are
negatively related to inflation. Marbuah
(2010) investigated the relationship between
inflation and economic growth. The study
found evidence of significant negative effect
of inflation on economic growth with and
without structural break. Based on it, this
study develops the following hypothesis:
H6: There is a negative relationship between
inflation and gross domestic product.
Foreign direct investment
Foreign direct investment (FDI) is
any form of investment that earns an interest
in enterprise which functions outside of
domestic territory of investor. Borensztein et
al. (1998) suggested that FDI is an important
vehicle for the transfer of technology,
contributing relatively more to growth than
domestic investment. Another recent study
also confirmed that the important role of FDI
is to stimulate economic growth in the Euro
zone countries (Pegkas, 2015). Based on it,
this study develops the following hypothesis:
H7: There is a positive relationship between
foreign direct investment and gross domestic
product.
Per capita income
Per capita income is a measure of the
amount of money that is being earned per
person in a certain area. It can be calculated
for a country by dividing the country's
national income by its population. Spatafora
(2005) found that there is a positive and
significant relationship between per capita
income and poverty alleviation. Ravallion
and Chen (2008) found that there exists very
strong positive relationship of per capita
income growth with poverty reduction.
Based on it, the study develops the following
hypothesis:
H8: There is a positive relationship between
per capita income and poverty alleviation.
Consumption Consumption refers to the action of
using up a resource. In economics, the
consumption function is a single
mathematical function used to express
consumer spending. Durand (1996) argued
that remittances influence a country‘s
economy directly by way of investment or
indirectly through the multiplier effect of
consumption which elicits investments in
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production to meet the demand upsurge.
Anyanwu (2011) found that remittances that
raise the consumption levels of rural
households might have substantial multiplier
effects because they are more likely to be
spent on domestically produced goods.
Based on it, the study develops the following
hypothesis:
H9: There is a positive relationship between
consumption and poverty alleviation.
Unemployment rate The unemployment rate is the share
of the labor force that is jobless, expressed
as a percentage. Huang and Yeh (2013)
supported the inverse relationship of
economic growth and poverty alleviation
with unemployment. Similarly, Grogan et al.
(2013) found that there is negative
relationship between the people unemployed
in the country and poverty alleviation. Based
on it, the study develops the following
hypothesis:
H10: There is a negative relationship
between unemployment rate and poverty
alleviation. Literacy rate
Literacy represents the lifelong,
intellectual process of gaining meaning from
a critical interpretation of written or printed
text. Moore (2005) showed that low
education is a key factor in keeping people
poor over decades or lifecycles. Janjua and
Kamal (2011) revealed that increase in
literacy rate has a higher effect on the
economic growth due to which the country
may eradicate the poverty for the uplifting
the living standard of the country population.
Based on it, the study develops the following
hypothesis.
H11: There is a positive relationship between
literacy rate and poverty alleviation.
3. Results and discussion
Descriptive statistics
Table 2 presents the descriptive
statistics of selected dependent and
independent variables during the period of
1995/96 to 2014/15.
Table 2: Descriptive statistics Table 2 presents the descriptive statistics of
dependent and independent variables. The result is
based on descriptive statistics of variables used in
this study during the period from 1995/96 to 2014/15.
GDP (gross domestic product is the real GDP of the
country, in Billion Rupees) and PA (poverty
alleviation is the population not living below poverty
line, in percentage) are the dependent variables. The
independent variables are REM (remittance is defined
as earnings from foreign employment, in Billion
Rupees), CON (consumption is defined as resources used by households, in Billion Rupees), FDI (foreign
direct investment is defined as net inflow of
investment from abroad, in Billion Rupees), MS
(broad money supply is defined as total money
circulation in market plus demand deposit, in Billion
Rupees), FA (foreign aid is the goods, capital or
services received by a country from abroad, in Billion
Rupees), IP (industrial production is the total
industrial production of the country, PCI (per capita
income is the national income divided by the total
population of the country in a given year), UR
(unemployment rate is the percentage of unemployed population in the country, in percentage) and LR
(literacy rate is the percentage of literate population
in the country, in percentage)
Table 2: Descriptive statistics
Variables Minimum Maximum Mean S.D.
Gross domestic product (in Billion Rupees) 256.00 2249 938.15 660.17
Poverty alleviation (%) 59.60 78.40 69.45 5.05
Total remittance inflow (in Billion Rupees) 25.19 665.00 201.55 209.67
Broad money supply (in Billion Rupees) 92.65 2018.93 588.95 567.32
Foreign aid (in Billion Rupees) 5.71 59.21 29.63 18.27
Industrial production (in Billion Rupees) 54.99 265.75 130.97 70.89
Inflation (%) 2.50 12.60 7.24 3.01
Foreign direct investment (in Billion Rupees) -0.48 9.19 2.15 2.95
Per capita income (in Rupees) 12139.00 80900 33587.40 21503.56
Consumption (in Billion Rupees) 195.58 1843.72 692.31 496.93
Unemployment rate (%) 1.80 4.50 2.82 0.69
Literacy rate (%) 39.76 63.90 50.79 8.35
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Correlation analysis
Having indicated the descriptive
statistics, Pearson‘s correlation coefficients
are computed and the results are presented in
Table 3. More specifically, it shows the
correlation coefficients of dependent and
independent variables.
Table 3: Pearson’s correlation coefficient
matrix Table 3presents the bivariate Pearson‟s correlation coefficients between different variables used in the study. The correlation coefficients are
based on the study during the period from 1995/96 to 2014/15. GDP (gross domestic product is the real
GDP of the country, in Billion Rupees) and PA
(poverty alleviation is the population not living below
poverty line, in percentage) are the dependent
variables. The independent variables are REM
(remittance is defined as earnings from foreign
employment, in Billion Rupees), CON (consumption is
defined as resources used by households, in Billion
Rupees), FDI (foreign direct investment is defined as
net inflow of investment from abroad, in Billion
Rupees), MS (broad money supply is defined as total
money circulation in market plus demand deposit, in Billion Rupees), FA (foreign aid is the goods, capital
or services received by a country from abroad, in
Billion Rupees), IP (industrial production is the total
industrial production of the country, in Billion
Rupees), INF (inflation is the continuous increase in
general price of goods and services in the economy,
in percentage), PCI (per capita income is the national
income divided by the total population of the country
in a given year), UR (unemployment rate is the
percentage of unemployed population in the country,
in percentage) and LR (literacy rate is the percentage of literate population in the country, in percentage)
Notes: The asterisk signs (**) and (*) indicate that
the results are significant at 1 percent and 5 percent
level respectively. Table 3 shows that gross domestic
product is positively correlated to total
remittance inflow. It indicates that increase
in total remittance inflow leads to increase in
gross domestic product. Similarly, gross
domestic product is positively correlated to
broad money supply. It indicates that
increase in broad money supply leads to
increase in gross domestic product.
Likewise, gross domestic product is
positively correlated to foreign aid. It
indicates that higher the foreign aid, higher
would be the gross domestic product.
Likewise, the gross domestic product is
positively correlated to industrial production.
It indicates that higher the industrial
production, higher would be the gross
domestic product. The study also shows that
gross domestic product is positively
correlated to inflation. It indicates that
higher the inflation, higher would be the
gross domestic product.
Similarly, the result shows that
poverty alleviation is positively correlated to
total remittance inflow. It indicates that
increase in total remittance inflow leads to
increase in poverty alleviation. The poverty
alleviation is positively correlated to foreign
direct investment. It indicates that higher the
foreign direct investment, higher would be
the percentage of poverty alleviation.
Likewise, poverty alleviation is positively
Variables GDP PA REM MS FA IP INF FDI PCI CON UR LR
G
D
Pt
-1
GDP 1
PA 0.696**
1
REM 0.685**
0.738**
1
MS 0.678**
0.754**
0.590**
1
FA 0.529**
0.554* 0.831
** 0.796
** 1
IP 0.693
** 0.682
** 0.682
** 0.564
** 0.823
** 1
INF 0.528
* 0.326 0.514
* 0.477
* 0.673
** 0.511
* 1
FDI 0.757
** 0.568
** 0.765
** 0.709
** 0.773
** 0.791
** 0.443 1
PCI 0.795
** 0.685
** 0.693
** 0.591
** 0.817
** 0.689
** 0.495
* 0.758
** 1
CON 0.792
** 0.588
** 0.791
** 0.594
** 0.803
** 0.782
** 0.485
* 0.730
** 0.693
** 1
UR -0.044 -0.292 0.022 0.016 0.199 -0.054 -0.045 0.167 -0.020 -0.027 1
LR 0.787
** 0.753
** 0.853
** 0.847
** 0.821
** 0.874
** 0.594
** 0.675
** 0.873
** 0.866
** -0.033 1
GDPt-1 0.794
** 0.892
** 0.789
** 0.587
** 0.825
** 0.588
** 0.506
* 0.747
** 0.692
** 0.691
** -0.033 0.869
** 1
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correlated to per capita income. It indicates
that higher the per capita income, higher
would be the percentage of poverty
alleviation.
Regression analysis
Having indicated the Pearson‘s
correlation coefficients, the regression
analysis has been performed and the results
are presented in Table 4. More specifically,
the table shows the regression results of
remittance inflow, broad money supply,
foreign aid, industrial production, inflation,
and foreign direct investment on gross
domestic product.
Table 4: Regression analysis of remittance
inflow, broad money supply, foreign aid,
industrial production, inflation and
foreign direct investment on gross
domestic product (The table shows regression results of
variables from 1995/96 to 2014/15. The model is
GDPit= β0 + β1 REMit + β2MSit + β3FAit +
β4IPit+β5INFit +β6FDIit +GDPt-1+ eit. GDP (gross
domestic product is the real GDP of the country, in
Billion Rupees) is the dependent variable. The independent variables are REM (remittance is defined
as earnings from foreign employment, in Billion
Rupees), FDI (foreign direct investment is defined as
net inflow of investment from abroad, in Billion
Rupees), MS (broad money supply is defined as total
money circulation in market plus demand deposit, in
Billion Rupees), FA (foreign aid is the goods, capital
or services received by a country from abroad, in
Billion Rupees), IP (industrial production is the total
industrial production of the country, in Billion
Rupees), INF (inflation is the continuous increase in
general price of goods and services in the economy, in percentage)
Model Intercepts
Regression coefficients of Adj-
R2 SEE
F-
value REM MS FA IP INF FDI GDPt-1
1 12.78
(8.64)**
0.76
(24.59)**
0.74 115.31 60.73
2 67.84
(5.80)**
0.75
(19.92)**
0.65 141.27 39.89
3 5.92
(0.31)
0.35
(6.28)**
0.60 379.67 39.44
4 72.86
(7.09)**
0.71
(35.57)**
0.79 80.34 55.01
5 98.73
(0.29)
0.48
(12.64)
*
0.24 576.06 6.95
6 73.61
(4.64)**
0.56
(14.92)*
*
0.55 443.12 24.17
7 21.22
(5.07)**
0.42
(56.15)**
0.69 51.10 31.14
8 30.31
(7.52)**
2.75
(2.96)**
4.33
(4.39) **
0.71 118.14 28.13
9 51.14
(5.86)**
21.86
(2.99)**
64.76
(5.43)
**
0.69 369.16 21.88
10 34.30
(4.94) **
52.54
(1.43)
145.82
(3.89)**
0.57 430.72 13.82
11 39.33
(4.99) **
3.01
(5.99) **
6.52
(6.49)
**
0.86
(3.75)**
0.74 40.94 70.90
Notes: i. Figures in parentheses are t- values.
ii. The asterisk signs (**) and (*) indicate that the results are significant at 1 percent and 5 percent level respectively. iii. Dependent variable is gross domestic product.
Table 4 shows that the beta coefficients for remittance inflow are positive and
significant with gross domestic product. It indicates that increase in total remittance inflow
leads to increase in gross domestic product. This finding is consistent with the findings of
Ivakhnyuk (2006). Similarly, the beta coefficients for broad money supply are positive and
significant with gross domestic product. It indicates that increase in broad money supply
leads to increase in gross domestic product. This finding is similar to the findings of Islamet
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
al. (2004). Likewise, the beta coefficients for industrial production are positive and
significant with gross domestic product. It indicates that higher the industrial production,
higher would be the gross domestic product. This finding is similar to the findings of Kibriya
et al. (2014).
Table 5 shows the regression results of remittance inflow, per capita income,
consumption, unemployment rate and literacy rate on poverty alleviation.
Table 4.7: Regression analysis of total remittance inflow, per capita income,
consumption, unemployment rate and literacy rate on poverty alleviation ((The table shows regression results of variables based on time series data from period of 1995/96 to
2014/15. The regression result consists of specification of the model in the form of simple and multiple
regressions. The model is PA/PR it = β0 + β1REMit + β2PCIit + β3CONit + β4URit + β5LRit + uit. Dependent
variable is poverty alleviation and independent variables are REM (remittance defined as earnings from abroad
employment, in Billion Rupees), PCI (per capita income defined as income of individuals within the country,in
Rupees),CON (consumption defined as action of using of the resources by households, in Billion Rupees), UR (unemployment rate defined as individual not getting job, in percentage) and LR ( literacy rate defined as
educated population of the country, in percentage).
Notes: i. Figures in parentheses are t-values.
ii. The asterisk signs (**) and (*) indicate that the results are significant at 1 percent and 5 percent level respectively. iii. Dependent variable is poverty alleviation.
Table 5 shows that the beta
coefficients for remittance inflow are
positive and significant with poverty
alleviation. It indicates that increase in
total remittance inflow leads to increase in
poverty alleviation. This finding is
consistent with the findings of Pradhan et
al. (2008). Similarly, the beta coefficients
for per capita income are positive and
significant with poverty alleviation. It
indicates that higher the per capita income,
higher would be the percentage of poverty
alleviation. This finding is similar to the
findings ofRavallion and Chen (2008).
However, the beta coefficients for
unemployment rate are negative and
significant with poverty alleviation. It
indicates that decrease in industrial
production leads to increase in the
percentage of poverty alleviation. This
finding is similar to the findings of Grogan
et al. (2013)
4. Summary and conclusion
Remittance is the flow of money
from migrants abroad to their families in
their country of origin. The flows of
remittance has increased significantly
during recent decades and is expected to
Models Intercepts Regression coefficients of
Adj-R2 SEE F- value
REM PCI CON UR LR
1 65.38
(73.45)**
0.25
(16.51)**
0.69 2.83 42.33
2 62.47
(61.22)**
0.18
(8.07)**
0.57 2.42 31.04
3 63.2
(67.88)**
0.11
(8.19)**
0.58 2.39 37.07
4 75.49
(15.76)**
-0.16
(-1.03)
0.08 4.96 1.68
5 46.3
(9.59)**
0.16
(4.86)** 0.54 3.41 23.59
6 54.82
(23.71)**
0.01
(1.67)
0.01
(0.99)
0.71 1.65 54.11
7 70.63
(13.91)**
0.01
(5.08)**
-1.97
(-2.89)*
0.84 2.05 33.21
8 69.48
(10.80)**
0.019
(3.59)**
-2.25
(-2.73)*
0.05
(0.39) 0.76 2.46 21.35
9 63.85
(17.12)**
0.01
(2.39)*
0.02
(0.49)
-1.17
(-2.36)*
0.93 1.38 48.16
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continue increasing into the foreseeable
future as more people migrates in response
to globalization and increasing wage
differences. Remittance means the transfer
of funds from international migrants to
their family members in their home
country. It is different from other external
capital inflow like foreign direct
investment, foreign loans and aids. Foreign
remittance is the source of poverty
reduction, better health care and education.
Remittance is the main source of
increasing investment and consumption in
recipient countries. The increase in
investment and consumption is the sign of
economic development.
This study attempts to examine the impact
of remittance on economic growth and
poverty alleviation in Nepal. The study is
based on secondary data of 20
observations for the period of 1995/96 to
2014/15.
The study shows that remittance inflow,
broad money supply, foreign aid, industrial
production, inflation, and foreign direct
investment have positive and significant
impact on gross domestic product.
Similarly, remittance inflow, per capita
income, consumption and literacy rate
have positive impact on poverty
alleviation. However, unemployment rate
has negative impact on liquid poverty
alleviation. The study concludes that total
remittance helps in the economic growth
of Nepal. The study also concludes that
remittance followed by money supply and
industrial production is the most
influencing variable for the economic
growth of Nepal.
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
IMPACT OF CORPORATE GOVERNANCE ON DIVIDEND POLICY OF
NEPALESE ENTERPRISE
RADHE S. PRADHAN
Uniglobe College, Pokhara
University, Nepal
NITESH RAJ BARTAULA
Uniglobe College, Pokhara
University, Nepal
OM SHRESTHA
Uniglobe College, Pokhara
University, Nepal
POOJA GNAWALI
Uniglobe College, Pokhara
University, Nepal
POSHAN LAMICHHANE
Uniglobe College, Pokhara
University, Nepal
PRATIKSHA PARAJULI
Uniglobe College, Pokhara
University, Nepal
Abstract
This study examines the relationship between corporate governance and dividend
policy of Nepalese enterprises. The dividend payout and dividend yield are the selected
dependent variables. Firm size, liquidity, CEO duality, return on assets, foreign ownership,
gender diversity on board, managerial ownership, institutional ownership and leverage are
the independent variables. The study is based on 126 observations of 14 Nepalese
commercial banks and 7 insurance companies for the period of 6 years from 2010/2011 to
2015/2016. The data are collected from the annual reports of selected Nepalese commercial
banks and insurance companies. The multiple regression models are performed to test the
significance and impact of corporate governance on the dividend policy of Nepalese
enterprises.The study reveals that firm size and foreign ownership are positively related to
company‟s dividend policy (DPR and DY).This indicates that higher the firm size and higher
the foreign ownership, greater would be the company‟s dividend policy (DPR and DY).The
regression results show that institutional ownership has negative impact on the dividend
payout ratio and dividend yield. It means that decrease in institutional ownership leads to
increase in dividend payout ratio and dividend yield.
Keywords: Dividend payout, dividend yield, firm size, liquidity, returns on assets, foreign
ownership, and managerial ownership.
1. Introduction
Corporate governance (CG) is the
process which facilitates the creation of
shareholder‘s value, protection of the
individual and collective interests of all
stakeholders. The concept of corporate
governance is defined as dealing with the
ways in which suppliers of finance to
corporations governance has a positive
impact on organizational performance
(Claessen, 2009).
Corporate governance has become a
contemporary issue because of its enormous
contribution to the economic growth and
development of nations (Tornyeva and
Wereko, 2012). Effective governance is
critical to all economic relations especially
in emerging and transition economies
(Dharwardkar, 2000).
The good corporate governance helps
in enhancing firm‘s performance. This is
evident by the increasing attention being
given to matters of corporate governance by
governments, regulatory bodies, regional
bodies, and private institutions (Tornyeva
and Wereko, 2012). Corporate governance
refers to the way an organization is directed,
administrated or controlled. It includes the
set of rules and regulations that affect the
manager‘s decision and contribute to the
way company is perceived by the current
and potential stakeholders.
The corporate governance structure
specifies the distribution of rights and
responsibilities among different participants
in the corporation such as; boards, managers,
shareholders and other stakeholders and
spells out the rules and procedures and also
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Aarhat Multidisciplinary International Education Research Journal (AMIERJ) Page 168
EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
decision making assistance on corporate
affairs (Thuraisingam, 2013).
Corporate governance refers to set of
rules and incentives by which the
management of a company is directed and
controlled (Velnampy, 2013). While the
objective of the corporation‘s shareholder is
a return on their investment, managers are
likely to have other goals, such as power and
prestige of running a large and powerful
organizations, or entertainment perquisites
of their position. In this situation, managers
superior access to inside information and the
relatively powerless position of the
numerous and dispersed shareholders, mean
that managers are likely to have upper hand
(Jensen, 1983).
Corporate governance is seen as an
essential mechanism helping the company to
attain its corporate objectives and
monitoring performance in achieving these
objectives (Mallin, 2013).
Corporate governance refers to a set
of rules and incentives by which the
management of a company is directed and
controlled. Good corporate governance
maximizes the profitability and long term
value of the firm for the shareholders
(Heenetigala, 2011 ). The concept of
corporate governance presumes a
fundamental tension between shareholders
and corporate managers (Meckling, 1976).
Dividend payment is a major component of
stock return to shareholders. Dividend
payment could provide a signal to the
investors that the company is complying
with good corporate governance practices
(Jo and Pan, 2009).
Lee (2009) found that there is a
positive relationship between the bank‘s
profitability, bank‘s size, and the dividend
payout. Likewise, the profitability, leverage,
changes in dividends and collateral capacity
had a positive significant impact on the
dividend policies of banks in Ghana
(Yiadom and Agyei, 2011).
Similarly, Ekanayake and Parantham
(2010) stated that there is a positive impact
of CEO duality on firm‘s dividend policy
and there is a negative impact of ownership
structure on firm‘s dividend policy. It is
found that firm size and profitability explain
firm dividend policy. Firm size has a
negative relationship with the dividend
payout ratio and dividend yield. It indicates
larger the firm, the more likely it is to retain
cash to pay off its liabilities (Bushra and
Mishra, 2015).
Likewise, there is a negative
relationship between managerial ownership
and dividend payout (Rozeff, 1982; Jensen
et al., 1992 and Eckbo & Verma, 1994). It
means that firms with higher managerial
ownership tend to increase internal funds at
the expense of low dividend payouts in order
to finance investments. The managers are
reluctant to pay dividend (Jensen, 1986).
However, both managerial ownership and
dividends resolve agency problems (Chen
and Steiner, 1999, Kim et al., 2007).
Similarly, Jensen et al. (1992) found a
negative relationship between leverage and
dividends.
A firm acquiring debt will have fixed
financial charges, interests and repayment of
principals and thus leads the firm into
liquidation. As a consequence, the firm has
tendency to pay lower dividends to maintain
good liquidity position and cash flow. There
is a significant positive relationship between
total foreign ownership and dividend policy
and significant negative relationships
between managerial ownership and dividend
policy (Aydin and Cadvar, 2015).
According to Kulathunga (2017),
there is a significant relationship between
corporate governance variables and dividend
policy. Board independence, CEO duality
and return on assets have significant positive
impact on dividend policy and size of the
board has negative impact on dividend
policy. The foreign investors with strong
monitoring incentives lead firms to pay more
dividends (Gong, 2015).
The relationships between
independent nonexecutive directors, board
size, CEO, proportion of family member on
board and concentrated ownerships and
dividend payout (Shehu, 2015). Board size,
board composition, CEO tenure and
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
management equity holding have a weak
negative relationship with dividend payout
(Ikunda et al.,2016).
Further, the study found that board
composition and managerial equity holding
were found to have no statistical significant
impact on the dividend payout. Board size,
board independence, CEO duality, return on
assets (ROA) and debt-to total assets
variables align with the corporate
governance and dividend policy (Ajanthan,
2013). The results of the study suggested
that only CEO duality is negatively related
to dividend payout whereas board size,
board independence, return on assets and
debt-to-total assets do not appear to be
significantly related to the dividend payout.
In Nepalese context, Pradhan (2003)
examined that major motive for paying cash
dividends is to convey information to
shareholder about favorable prospects of the
enterprise.
Pradhan and Balampaki (2004) found
that the size has a negative impact on
dividend yield. Dhungel(2011) revealed that
it is unclear about the relationship between
market price per share and dividend per
share in the context of Nepal.
According to Adhikari (2013), size
and liquidity are major determinants of
corporate dividend payout in Nepal. This
study also reveals that there is sector specific
importance of the determinants of corporate
dividend payout in Nepal.
Manandhar (1998)
revealed that dividend per share and returns
on equity have a positive impact on market
capitalization while earning per share, price
earnings ratio, and dividend yield have a
negative impact.
The study found that there is a
positive relationship between dividend and
stock price. Dividend per share is motivating
factor in Nepalese financial sector. It is
strong enough to increase MPS of the
banking and non-financial firms (Joshi,
2011).
The above discussion reveals that
there is no consistency in the findings of
various studies concerning the impact of
corporate governance on dividend policy.
The major objective of the study is to
assess the relationship between corporate
governance and dividend policy in Nepalese
enterprises. More specifically, it examines
the impact of firm size, liquidity, CEO
duality, return on assets, foreign ownership,
gender diversity on board, managerial
ownership and leverage on dividend policy
of Nepalese enterprises.
The remainder of this study is
organized as follows: Section two describes
the sample, data and methodology. Section
three presents the empirical results and the
final section draw conclusions and discuss
the implications of the study findings.
2. Methodological aspects
The study is based on the secondary
data which were collected from 14
commercial banks and 7 insurance
companies in Nepal. The main sources of
data are annual reports of the selected
Nepalese commercial banks and insurance
companies. Table 1 shows the list of banks
and non-banks selected for the study along
with the study period and number of
observations.
Table 1: Number of commercial banks and insurance companies selected for the study
along with study period and number of observations
S.N Name of enterprises Study period Observations
1 Nabil Bank Limited 2010/11-2015/16 6
2 Nepal SBI Bank Limited 2010/11-2015/16 6
3 Nepal Bangladesh Bank Limited 2010/11-2015/16 6
4 Everest Bank Limited 2010/11-2015/16 6
5 Himalayan Bank Limited 2010/11-2015/16 6
6 Kumari Bank Limited 2010/11-2015/16 6
7 Machhapuchchhre Bank Limited 2010/11-2015/16 6
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8 Laxmi Bank Limited 2010/11-2015/16 6
9 Nepal Investment Bank Limited 2010/11-2015/16 6
10 Standard Chartered Bank Limited 2010/11-2015/16 6
11 Citizens International Bank Limited 2010/11-2015/16 6
12 Siddhartha Bank Limited 2010/11-2015/16 6
13 Global IME Bank Limited 2010/11-2015/16 6
14 Nepal Bank Limited 2010/11-2015/16 6
15 Sagarmatha Insurance 2010/11-2015/16 6
16 Shikhar Insurance 2010/11-2015/16 6
17 LIC Insurance 2010/11-2015/16 6
18 Premier Insurance 2010/11-2015/16 6
19 Himalayan General Ltd. 2010/11-2015/16 6
20 Asian Insurance 2010/11-2015/16 6
21 Gurans Life Insurance 2010/11-2015/16 6
Total observations 126
Thus, this study is based on 126 observations.
The model
The model estimated in this study
assumes that the dividend policy depends on
bank and insurance specific and macro
variables. Therefore, the study has used the
following model:
Dividend policy=ƒ (firm size,
liquidity, CEO duality, return on assets,
foreign ownership, gender diversity on
board, managerial ownership, institutional
ownership and leverage)
More specifically, the given model
has been segmented into following models:
Model I
DPR = β0 + β1MO + β2LIQ +
β3CEOD + β4FORTOT + β5FS + β6BGD +
β7IO+ β8LEV+β9ROA+ e
Model II
DY = β0 + β1MO + β2LIQ +
β3CEOD + β4FORTOT + β5FS + β6BGD +
β7IO+ β8LEV+β9ROA+ e
Where,
DPR = Dividend payout ratio is
defined as dividend per share to earnings per
share.
DY = Dividend yield is defined as
dividend per share divided by market per
share.
GD = Gender diversity refers to the
number of women directors in a board.
FS = Firm size of the banks refers to the
total assets of firms.
IO =Institutional ownership represent shares
held by institutional investors such as banks
and insurance companies.
FORTOT = Total foreign ownership is
defined as the ownership of foreign investor
in Nepalese enterprise.
LEV = Total debt to total shareholders‘
equity.
CEOD = 1 if CEO is chairman as well and 0
if otherwise.
MO =Managerial ownership is defined as
the total percentage of equity held by inside
shareholders that take part in the company‘s
management.
LIQ=Liquidity is defined as the degree to
which an asset or security can be bought or
sold in the market without affecting the asset
price.
ROA = Return on assets is defined as net
profit after tax to total assets.
Firm size
A total asset has been used as a
measure of firm size. Lintner (1956)
revealed that firm size has negative impact
on company‘s dividend policy. Similarly,
there is negative relationship between firm
size and dividend payout ratio (Twaijry,
2007). Likewise, Asghar et al. (2011) stated
that firm size negatively influences on the
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dividend policy. However, Nasir et al.,
(2010) found that firm size is positively
related to dividend payout ratio. Based on it,
this study develops the following
hypothesis:
H1: There is negative relationship between
firm size and company‟s dividend policy.
Liquidity
Liquidity refers to the ease with
which an investment asset (stock, bond, and
mutual funds) can be converted into cash in
a short period of time without a significance
decrease in its value (Eljelly, 2004). Jensen
and Meckling (1976) found that higher
liquidity leads to higher dividend payment.
Likewise, Ho (2003) found that liquidity is
positively related to dividend policy.
Similarly, Alli and Ramirez (1993) found
that dividend payment depend upon cash
flow and current earnings do not really
reflect a firm‘s ability to pay dividend.
Based on it, this study develops the
following hypothesis:
H2: There is a positive relation between
liquidity level and company‟s dividend
policy.
Foreign ownership
Foreign ownership in bank is the
state of being portion owned by a person or
company from another country. Foreign
ownership (FO) has a significant positive
association with the dividend payout ratio.
Hence, the higher is the foreign ownership
in the firm the higher will be dividend
payment. La Porta et al. (2000) found that
foreign ownership has a positive impact on
dividend payment. The study reveals the
importance of foreign shareholding on
dividend policy that a company adopts.
However, Lam et al. (2012) found that
foreign ownership has significantly negative
effect on cash dividends. Baba (2009)
showed that if a firm has paid dividends, it
will have a higher proportion of foreign
ownership. It means that if a firm increases
(decreases) dividend payment, foreign
ownership will increase (decrease). Based
on it, this study develops the following
hypothesis:
H3: There is a positive relationship between
foreign ownership and company‟s dividend
policy.
Gender diversity on board
Women in the BOD mean different
perspectives and point of views on issues
hence the potential to increase the value for
shareholders according to the work of
(Campbell and Vera, 2007). Both Terjesen
et al. (2015) and Luckerath-Rovers (2013)
found positive relationship between the
number of women on the board and the
performance. Likewise, Adams (2008)
argued that presence of diversity in gender
may also increase the efficiency of banks.
Female directors on the board are more
likely to prevent management‘s
opportunistic behaviors by supporting more
dividend payouts. Bilimoria (2000) revealed
that women directors are valued as board
members for their productive discourse.
Based on it, this study develops the
following hypothesis:
H4: There is a positive relationship between
gender diversity on board and company‟s
dividend policy.
CEO duality
According to Asamoah (2005), CEO
duality means the situation when the CEO
also holds the position of the chairman of
the board. The board of directors is
appointing to monitor managers such as the
CEO on the behalf of the shareholders. Abor
and Fiador (2013) found a negative
relationship between CEO duality and
dividend payout. This could be explained
that when CEO doubles as board chair, it
affords the CEO a greater opportunity to
influence the decisions made by the board.
Based on it, this study develops the
following hypothesis:
H5: There is a negative relationship between
CEO duality and company‟s dividend policy.
Institutional ownership
The institutional ownership refers
shares held by institutional investors such as
banks and insurance companies. Eckbo and
Verma (1994) found that institutional
investors prefer free cash flow to be
distributed in form of dividends. However,
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institutional owners are expected to have a
negative effect on both dependent variables
mainly because such firms tend to pay
dividends in order to reduce the cost of
agency conflict (Jensen, 1986 and Rozeff,
1982). Similarly, Renneboog and Szilagyi
(2008) found that highly concentrated
institutional ownership has a negative effect
on dividend payouts. Similarly, According
to Shleifer and Vishny (1986), institutional
ownership creates the incentives to monitor
management, thereby overcomes the free-
rider problem. Similarly, Wiberg (2008)
found the positive relationship between
institutional ownership and dividend policy.
Based on it, this study develops the
following hypothesis:
H6: There is a negative relationship between
institutional ownership and company‟s
dividend policy.
Managerial ownership
Managerial ownership refers to the
total percentage of equity held by inside
shareholders that take part in the company‘s
management. Jensen (1986) found the
positive relationship between managerial
ownership and dividend policy. However,
Chen et al. (2005) found a negative
relationship between managerial ownership
and dividend policy. Similarly, Jensen et al.
(1992) show that insider ownership is
associated with lowers dividend payout.
Likewise, there is negative relationship
between insider ownership and dividend
payout (Rozeff, 1982; Perry and Rimbey,
1995 and Zhang and Keasey, 2002).
However, Abdullah et al. (2012) found
concentrated ownership has a significant
positive influence on dividend policy. Based
on it, this study develops the following
hypothesis:
H7: There is a negative relationship between
managerial ownership and company‟s
dividend policy.
Return on assets
According to Asamoah (2005),
return on assets (ROA) means an indicator
of how profitable an organization is relative
to its total assets. ROA provides information
regarding how efficient management is at
using its assets to generate earnings. Belanes
et al. (2007) found that return on assets is
positively related to dividend yield.
H8: There is a positive relationship between
managerial ownership and company‟s
dividend policy.
Leverage
Leverage represents a firm‘s
leverage, measured by short-term and long-
term debt divided by total assets. It is
assumed that leverage, that is, total debt to
total assets play a significant role in
determining the firm performance. Bhaduri
(2002) found that leverage is positively
related to dividend policy. However, Al-
Malkawi (2007), Patra et al. (2012) and Al-
Najjar (2009) found that leverage is
negatively related to dividend payments
because firms with more debt prefer to
retain more in order to repay loan instead of
paying more dividends. Similarly, Jensen et
al. (1992) found negative relationship
between leverage and dividends. Based on
it, this study develops the following
hypothesis:
H9: There is a negative relationship between
leverage and company‟s dividend policy.
2. Results and discussion
Descriptive statistics
Table 2 presents the descriptive statistics of
selected dependent and independent
variables during the period 2010/11 to
2015/16.
Table 2: Descriptive statistics
This table shows the descriptive
statistics of dependent, independent and
control variables of commercial banks and
insurance companies for the study period of
2010/11 to 2015/16. DPR(Dividend payout
ratio is defined as dividend per share to
earnings per share, in percentage), DY
(Dividend yield is defined as dividend per
share divided by market per share, in
percentage), GD(Gender diversity refers to
the number of women directors in a board),
FS(Firm size of the banks refers to the total
assets of firms, in Billion) , IO (Institutional
ownership represent shares held by
institutional investors such as banks and
insurance companies, in percentage),
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FORTOT (Total foreign ownership is
defined as the ownership of foreign investor
in Nepalese enterprise, in percentage), LEV(
Leverage is defined as total debt to total
shareholders‟ equity, in
percentage)CEOD(1 if CEO is chairman as
well and 0 if otherwise ), MO(Managerial
ownership is defined as the total percentage
of equity held by inside shareholders that
take part in the company‟s management, in
percentage), LIQ(Liquidity is defined as the
degree to which an asset or security can be
bought or sold in the market without
affecting the asset price, in times),
ROA(Return on assets is defined as net
profit after tax to total assets, in
percentage).
Table 2: Descriptive statistics
Variables Minimum Maximum Mean Std. Deviation
DY 0.00 16.93 1.29 2.73
DPR 0.00 45.94 4.56 10.13
FS 0.17 129.89 37.48 33.07
MO 0.00 1.00 0.31 0.46
LIQ 0.04 0.56 0.19 0.12
GD 0.00 2.00 0.17 0.43
IO 0.00 80.00 19.95 21.42
FORTOT 0.00 75.00 14.28 23.06
ROA -0.07 4.01 1.16 0.97
LEV 0.04 1.08 0.74 0.29
Table 2 shows that average dividend
yield has a minimum value of 0 percent and a
maximum value of 16.93 percent with
average value of 1.29 percent. The average
value dividend payout is noticed to be 4.56
percent with a minimum value of zero
percent and a maximum value of 45.94
percent. Likewise, the size varies from a
minimum of Rs.18.95 in million to a
maximum value of Rs.25.59 in million
leading to an average of Rs.23.33 million.
Similarly, liquidity varies from a minimum
value of 0.05 times to a maximum value of
0.56 times leading to an average value of
0.19 percent. The average value of leverage
is observed to be 0.74 percent with a
minimum value of 0.04 percent and
maximum value of 1.08 percent. Similarly,
average value of managerial ownership is
observed to be 0.31 percent with a minimum
value of 0 percent and a maximum of 1
percent. Likewise, average value of total
foreign ownership is observed to be 14.28
percent with a minimum value of 0 percent
and a maximum of 75 percent. The average
value of return on assets is observed to be
1.16 percent with a minimum value of -0.07
percent and a maximum value of 4.01
percent. Similarly, average value of gender
diversity on board is observed to be 0.17
percent with a minimum value of 0 percent
and a maximum value of 2 percent. Likewise,
the average value of institutional ownership
of selected companies during the study
period is noticed to be 19.95 percent with a
minimum value of 0 percent and a maximum
value of 80 percent.
Correlation analysis Having indicated the descriptive statistics,
Pearson‘s correlation coefficients are
computed and the results are presented in
Table 3.
Table 3: Pearson’s correlation coefficients
matrix for enterprises
This table shows the Pearson correlation
coefficients of dependent and independent
variables of selected Nepalese commercial
banks and insurance companies for the
study period of 2010/11 to 2015/16.
DPR(Dividend payout ratio is defined as
dividend per share to earnings per share, in
percentage), DY (Dividend yield is defined
as dividend per share divided by market per
share, in percentage), GD(Gender diversity
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refers to the number of women directors in a
board), FS(firm size of bank refers to the
total assets of firms, in Billion rupees), IO
(Institutional ownership represent shares
held by institutional investors such as banks
and insurance companies, in percentage),
FORTOT (Total foreign ownership is
defined as the ownership of foreign investor
in Nepalese enterprise, in percentage), LEV(
Leverage is defined as total debt to total
shareholder‟s equity, in percentage) ,
CEOD( 1 if CEO is chairman as well as 0 if
otherwise ), MO(Managerial ownership is
defined as the total percentage of equity
held by inside shareholders that take part in
the company‟s management, in percentage),
LIQ(Liquidity is defined as the degree to
which an asset or security can be bought or
sold in the market without affecting the asset
price, in times), ROA(Return on assets is
defined as net profit after tax to total assets,
in percentage).
Table 3: Pearson’s correlation coefficients matrix for enterprises Variables DY DPR FS MO LIQ CEO
D
GD IO FORT
OT
ROA L
E
V
DY 1
DPR .096
1
FS .287*
*
.304*
* 1
MO -.189* .212*
.410*
*
1
LIQ
.235**
-
0.188
*
-
.418*
*
-
.297*
*
1
CEOD
-.094 .376*
*
.414*
* .111
-
.305*
*
1
GD -.108 .120 .142
.298**
-.198*
.157 1
IO -.110 -.127
.251*
*
-
0.015 -.086 .120 .057
1
FORTO
T .098 .523*
*
.551*
*
.548*
*
-
.303*
*
.513*
*
.352*
* .008
1
ROA -
.236**
.548*
*
.695*
*
.524*
*
-
.413**
.440*
*
.237*
* .045 .652**
1
LEV -
.311**
.245*
*
.599*
*
.383*
*
-
.431*
*
.305*
*
.233*
*
.266*
* .363**
.663*
*
1
Notes: The asterisk signs (**) and (*) indicate that the results are significant at 1 percent and
5 percent level respectively.
The result shows that liquidity and
firm size are positively related to dividend
yield. This indicates that higher the liquidity
and firm size, higher would be the dividend
yield. Likewise, foreign ownership is
positively correlated to dividend yield. It
indicates that increase in foreign ownership
leads to increase in dividend yield. However,
managerial ownership and institutional
ownership are negatively related to dividend
yield. It indicates that increase in managerial
and institutional ownership leads to decrease
in dividend yield. Similarly, CEO duality is
also negatively related to dividend yield. It
implies that the firm having different CEO
and chairman of the board has high dividend
yield. Likewise, gender diversity is also
negatively related to dividend yield. It means
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that smaller the number of women directors,
higher would be the dividend yield.
Similarly, return on assets and leverage are
negatively related to dividend yield. It
indicates that lower the return on assets and
leverage, higher would be the dividend yield.
The table shows that liquidity and
institutional ownership are negatively related
to dividend payout ratio. It indicates that
higher the liquidity and institutional
ownership, lower would be the dividend
payout ratio. However, the result also shows
that firm size is positively correlated to
dividend payout ratio. This means that larger
the firm size, higher would dividend payout
ratio. Likewise, managerial ownership and
foreign ownership are positively correlated
to dividend payout ratio. It indicates that
increase in managerial ownership and
foreign ownership leads to increase in
dividend payout ratio. Similarly, CEO
duality is also positively related to dividend
payout ratio. It implies that the firm having
CEO and chairman of the board as the same
person has high dividend payout ratio.
Likewise, gender diversity is also positively
related to dividend payout ratio. It means
that larger the number of women directors,
higher would be the dividend payout.
Similarly, return on assets and leverage are
positively related to dividend payout ratio. It
indicates that higher the return on assets and
leverage, higher would be the dividend
payout ratio.
Regression analysis
Having indicated the correlation
coefficients, regression analysis has been
performed and the results are presented in
Table 4. Table 4 shows that the beta
coefficient for firm size is positive which
shows that smaller the firm size, smaller
would be the dividend payout ratio. The
beta coefficient for managerial ownership is
positive which indicates that lower the
managerial ownership, lower would be the
dividend payout ratio. Likewise, the beta
coefficient for CEO duality is positive which
shows that the firm having CEO and
chairman of the board as the same person
has high dividend payout ratio.
Table 4: Estimated regression results of
FS, MO, LIQ, CEOD, GD, IO, FORTOT,
ROA and LEV on dividend payout ratio The results are based on pooled
cross-sectional data of 14 commercial banks
and 7 insurance companies with 126
observations by using linear regression
model. The results are based on the 6 years
(2010-2016) time series data of Nepalese
enterprises by using the linear regression
model. The model is DPR = β0 + β1MO +
β2LIQ + β3CEOD + β4FORTOT + β5FS +
β6BGD + β7IO+ β8LEV+ β9ROA+ e.
Dividend payout ratio and dividend yield
both refer to dividend policy. DPR(Dividend
payout ratio is defined as dividend per share
to earnings per share, in percentage), DY
(Dividend yield is defined as dividend per
share divided by market per share),
GD(Gender diversity refers to the number of
women directors in a board, in percentage),
FS( firm size of bank refers to the total
assets of firms, in Billion rupees) , IO
(Institutional ownership represent shares
held by institutional investors such as banks
and insurance companies, in percentage),
FORTOT (Total foreign ownership is
defined as the ownership of foreign investor
in Nepalese enterprise, in percentage), LEV(
Leverage is defined as total debt to total
shareholder‟s equity, in percentage) ),
CEOD( 1 if CEO is chairman as well as 0 if
otherwise ), MO(Managerial ownership is
defined as the total percentage of equity held
by inside shareholders that take part in the
company‟s management, in percentage),
LIQ(Liquidity is defined as the degree to
which an asset or security can be bought or
sold in the market without affecting the asset
price, in times), ROA(Return on assets is
defined as net profit after tax divided by total
assets, in percentage).
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Table 4: Estimated regression results of FS, MO, LIQ, CEOD, GD, IO, FORTOT, ROA
and LEV on dividend payout ratio
Notes:
i. Figures in parentheses are t- values.
ii. The asterisk signs (**) and (*) indicate that the results are significant at 1 percent and
5 percent level respectively.
iii. Dependent variable is dividend payout ratio.
However, the beta coefficient for
liquidity is negative which indicates that
lower the liquidity, higher would be the
dividend payout ratio. The beta coefficient
for gender diversity on board is positive. It
indicates that larger the number of female
directors on board, higher would be the
dividend payout ratio. This finding is similar
to the findings to the (Adams, 2008).
Likewise, beta coefficient for return on
assets is positive. This means that higher the
return on assets, higher would be the
dividend payout ratio.
Similarly, beta coefficient for foreign
ownership is positive. It implies that higher
the foreign ownership of the company,
higher would be the dividend payout ratio.
Similarly, beta coefficient for institutional
ownership is negative. It implies that higher
the institutional ownership of the company,
lower would be the dividend payout ratio.
Nonetheless, the beta coefficient for
leverage is positive which shows that more
leveraged the firm is, higher would be the
dividend payout ratio.Table 5 shows the
regression results of firm size, liquidity,
CEO duality, return on assets, foreign
ownership, gender diversity on board,
managerial ownership, institutional
ownership and leverage on dividend yield of
Nepalese enterprise.
Table 5: Estimated regression results of
FS, MO, LIQ, CEOD, GD, IO, FORTOT,
ROA and LEV on dividend yield
The results are based on pooled
cross-sectional data of 14 commercial banks
and 7 insurance companies with 126
observations by using linear regression
model. The results are based on the 6 years
(2010-2016) time series data of Nepalese
enterprises by using the linear regression
model. The model is DPR = β0 + β1MO +
β2LIQ + β3CEOD + β4FORTOT + β5FS +
β6BGD + β7IO+ β8LEV+ β9ROA+ e.
DPR(Dividend payout ratio is defined as
dividend per share to earnings per share),
Model Intercept FS MO LIQ CEOD GD IO FOR
TOT
R
O
A
L
E
V
Adj
R2
SEE F-value
1 1.07
-0.82
0.09
(3.56)** 0.85 9.69 12.66
2 3.13
(2.94)**
4.63
(2.42)* 0.04 9.94 5.85
3 7.54
(4.59**
-15.34
(-2.12)* 0.03 9.99 4.52
4 2.58
(2.72)**
9.25
(4.51)** 0.13 9.43 20.38
5 4.09
(4.25)**
2.8
-1.34 0.006 10.1 1.81
6 5.76
(4.68)**
-0.06
(-1.42) 0.008 10.09 2.02
7 1.28
-1.41
0.23
(6.83)
**
0.27 8.67 46.72
8 -2.04
(-1.73)
5.7
(7.
29)
**
0.29 8.51 53.16
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DY (Dividend yield is defined as dividend
per share divided by market per share),
GD(Gender diversity refers to the number of
women directors in a board), FS( firm size
of bank refers to the total assets of firms) ,
IO (Institutional ownership represent shares
held by institutional investors such as banks
and insurance companies), FORTOT (Total
foreign ownership is defined as the
ownership of foreign investor in Nepalese
enterprise), LEV( Leverage is defined as
total debt to total shareholder‟s equity ),
CEOD(A binary that equal one if the CEO is
chairman of the board and zero otherwise),
MO(Managerial ownership is defined as the
total percentage of equity held by inside
shareholders that take part in the company‟s
management), LIQ(Liquidity is defined as
the degree to which an asset or security can
be bought or sold in the market without
affecting the asset price), ROA(Return on
assets is defined as net profit after tax to
total assets)
Table 5: Estimated regression results of FS, MO, LIQ, CEOD, GD, IO, FORTOT, ROA
and LEV on dividend yield
Mo
del
Inter
cept Regression Ad
j
R2
SE
E F
FS M
O LIQ
CE
OD
G
D IO
FORT
OT ROA
LE
V
1
2.19 -
0.02
0.7
5
2.
62
11
.2 (6.16)
**
(-
3.34
)**
2
1.64
-
1.1
1
0.0
28
2.
69
4.
57 (5.69)
**
(-
2.1
4)*
3
0.32
5.18
0.0
48
2.
66
7.
27 (-
0.75)
(2.70
)**
4
1.43
-
0.62
0.0
01
2.
73
1.
1 (5.22)
**
(-
1.05
)
5
1.41
-
0.6
8
0.0
04
2.
72
1.
46 (5.52)
**
(-
1.2
1)
6
1.58
-
0.0
1
0.0
04
2.
72
1.
51 (4.74)
**
(-
1.2
3)
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7
1.46
(5.12)
**
-0.01
(-1.10)
0.0
2
2.
73
1.
21
8
2.06
-0.66
0.0
48
2.
66
7.
29 (5.58)
**
(2.70
)**
9
3.46
-
2.93
4 0.9
2.
6
13
.3 (5.44)
**
(-
3.65
)**
10
1.53 -
0.02
-
0.3
7
2.83 -0.03
0.7
3
2.
63
3.
45 (2.29)
*
(-
1.64
)
(-
0.6
2)
-1.33 (-
0.08)
11
3.30
(4.99)
**
-
0.02
(-
1.54
)
0.01
-0.90
-0.06
(-
0.15)
-
2.00
(-
1.72
)
0.0
8
2.
61
3.
26
Notes:
i. Figures in parenthesis are t-values
ii. The asterisk signs (**) and (*) indicate that the results are significant at 1 percent
and 5 percent level respectively.
iii. Dividend yield is dependent variable.
Table 5 shows that the beta
coefficient for liquidity is positive. This
means that higher the liquidity, higher would
be the dividend yield. This finding is similar
to the findings of (Ho, 2003). However, the
beta coefficient for managerial ownership is
negative. It indicates that higher the
managerial ownership, lower would be the
dividend yield. The beta coefficient for
foreign ownership is positive which shows
that higher the foreign ownership of the
company, higher would be the dividend
yield.
Likewise, the beta coefficient for
institutional ownership is negative. It implies
that higher the institutional ownership, lower
would be the dividend yield. The table
shows that the beta coefficient for CEO
duality is negative. It indicates that firm
having both CEO and chairman of the board
as the different person has high dividend
yield. The beta coefficient for gender
diversity on board is negative which
indicates that smaller the number of female
directors on board, higher would be the
dividend yield. Likewise, beta coefficient for
return on assets is negative which shows that
lower the return on assets, higher would be
the dividend yield. Similarly, beta
coefficient for leverage is negative. It
implies that higher the leverage of the
company, lower would be the dividend
yield. This finding is similar to the findings
to the (Patra et al., 2012)
4. Summary and conclusion
The dividend per share and dividend yield
becomes one of the attractive tools for both
existing and potential investors. It is not only
demanded by the high class investors, but
also attracted the interest of small investors.
The high rate of dividend per share and
dividend yield pushes the investors to invest
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
Aarhat Multidisciplinary International Education Research Journal (AMIERJ) Page 179
EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
in stocks, but many of them do not have
much knowledge about its operations and
factors affecting dividend policy. There are
various internal and external factors that
influence the dividend policy. The financial
performance of companies are the most
essential factors that can give visibility to
investors which plays a significant role to
gain reliable and consistent return by
selecting winning portfolio.
This study attempts to examine the
relationship between firm‘s performance and
dividend policy in Nepalese commercial
banks and insurance companies. This study
is based on secondary data of 14 commercial
banks and 7 insurance companies with 126
observations for the period of 2010/11 to
2015/16.
The study shows that firm size and
foreign ownership are positively related to
dividend payout ratio and dividend yield.
This indicates that larger the firm size and
higher the foreign ownership, higher would
be the dividend payout ratio. It also indicates
that smaller the firm size and smaller the
foreign ownership, smaller would be the
dividend yield. The regression results show
that institutional ownership has negative
impact on the dividend
payout ratio and dividend yield.
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FOREIGN DIRECT INVESTMENT: IMPACT ON INDIA
DR. J. P. BHOSALE
Head : Research Centre in Commerce,
Arts, Commerce & Science College, Narayangaon,
Tal : Junnar, Dist : Pune, Pin : 410504, Maharashtra, India.
Abstract
The traditional practice of selling goods to the consumer is unorganized retail like
Kirana store, Mom store. They have contact with local customer in relation seeming to be
relatives, Usually they are mingled with their customer as neighbour. By the time and
economy goes up, the consumers purchasing power and preference is changing. Based on the
taste & preference, now the unorganized sector is converting into organized sector that starts
from the urbanized area. Compared to other industry, the retail industry is bigger booming
potential industry. Each and every in need of product approach the retail shop. The domestic
organized players are very few in comparison of unorganized player. Compared with the
international organized player, the domestic players who are in the lack of capital are not
effective in healthy competition. SO the industry is in need of capital infusion.
Keywords: Foreign Direct Investment, Marketing, Retail, E-accounting.
Introduction
E-accounting is new development in
field of accounting. It means all your
transactions will record in online server or
data base. E-accounting involves performing
regular accounting functions, accounting
research and the accounting training and
education through various computer based
internet accounting tools such as digital tool
kits, various internet resources. International
web-based materials, institute and company
databases which are internet based, web
links, internet based accounting software and
electronic financial spreadsheet tools to
provide efficient decision making. An E-
accounting system could be thought of as an
inter-organizational system because of its
capability to electronically integrate a set of
firms.
According plays a critical role in the
success or failure of contemporary business
institutions. Accounting systems are
responsible for recording, analyzing,
monitoring and evaluating the financial
condition of companies, preparation of
documents necessary for tax purposes,
providing information support to many other
organizational functions and so on. Prior to
the advent of personal computers, businesses
were limited to manual methods for keeping
track of financial data.
In many operational applications the
accounting entries can be generated as a by-
product of the underlying transactions. A
computerized accounting system is able to
handle financial data efficiently, but the true
value of an accounting system was that it
was able to generate immediate reports
regarding the company.
Objectives of the Research Study
1. To study the conceptual background of
Retail Sector in India.
2. To study the position of Foreign Direct
Investment in India
3. To study the Impact of Foreign Direct
Investment
4. To give some suggestions for developing
Retail Sector in India.
Research Methodology
The present research paper is based on
secondary data only. The secondary data is
collected from various references books,
research articles and websites.
Foreign Direct Investment in India
Under Foreign exchange
Management Regulations, 2000 the Indian
Companies are allowed to raise funds from
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overseas investors. An Indian company
which is not engaged in any activity or in
manufacturing of item included the list a and
b appended may issue fresh shares subject to
the condition and sectoral cap as indicated
under Foreign Direct Scheme, subject to the
terms and condition specified.
Who can Invest in India
There are following categories of
person resident outside India who may
invest in the capital of Indian Company:
1. A non-resident entity.
2. A citizen or entity of Bangladesh under
Govt. Route.
3. NRI resident as well as citizen of Nepal
and Bhutan on repatriation basis.
4. Erstwhile OBCs as incorporated non-
resident entities.
5. An FLL under the Portfolio Investment
Scheme.
6. SEBI registered FLLs or NRIs through a
registered broker on recognized India
Stock Exchange.
7. SEBI registered Foreign Venture Capital
Investor.
Foreign Direct Investment (FDI) is
permitted as under the following forms of
investments:
1. Through financial collaborations.
2. Through joint ventures and technical
collaborations.
3. Through capital markets via Euro issues.
4. Through private placements or
preferential allotments.
Indian Entities Into Which FDI Can Be
Made
There are below mentioned entity
registered or incorporated under Indian law
can raise funds against capital :
i. An Indian Company.
ii. Partnership Firm.
iii. Proprietary Concern.
iv. Indian Venture Capital Undertaking
(ICVF)
v. Ventures Capital Fund (VCF)
vi. Limited Liability Partnership (LLP)
A Non-resident Indian or a person of
Indian Origin resident outside India can
invest in the capital of a firm or a proprietary
concern in India on non-repatriation basis.
Foreign Direct Investment in Trust other
than Venture Capital Funds is not permitted.
FDI is not allowed to invest in the above
mentioned entities engaged in any
agricultural activity or real estate business or
print media. FDI in resident entities other
than those mentioned above is not permitted.
Type of Instruments
An Indian company arrange fund
from a person resident out of India by issue
of following type of instrument which are
given below:
1. Equity Shares.
2. Preference Shares.
3. Debentures.
4. Issue of Foreign Currency Convertible
Bonds.
5. Depository Receipts.
6. Foreign Currency Exchangeable Bonds.
7. Impact of Foreign Direct Investment
8. Forex Reserve
9. As the limit is increased to 51% in the
multi brand retail, the direct investment
from abroad called FDI would inflow to
start the business. The inflow of capital
would increase the capital reserve in the
Balance of payment which shows the
ability of the nation in terms of Forex.
Farmers The one of the current
problem of Indian economic is fiscal deficit
which is mostly caused by subsidy give to
the farmers which is considered as
unproductive. The one way to cut such
subsidy is to make the farmers independent
by making the system securing them to be
paid good price for the commodity. The
organized retailers that are capital giant are
able to purchase directly from the farmers
paying good price. So the govt. should be
ensuring that the farmers are getting paid the
price of what they are eligible to.
SME
In the norms that are instructed to the
foreign player, they should purchase 30% of
the product they deal with from the small
and medium Enterprise. This ensures the
development of SME. The foreign player
would like to provide the quality product.
The SME would be encouraged to produce
the commodity that is of high quality.
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Infrastructure
The players are imposed with the
restriction of investing 50% of their
investment on the Back end infrastructure.
the ruling party in India where the economic
development is suffered by lack of
infrastructure is very cautions about to invest
in such area. It would become base for
economic in many ways, say transportation.
Distribution
The distribution system is one of the
factors determining the cost of product. As
they are invested in the infrastructure, they
could follow JIT. Say Wal-Mart, they are
not interested in expending in the stock
maintenance.
Food Wastage
With the poverty in one side, the
wastage of food is no another side in the
same country. It requires the effective
distribution system to avoid food wastage.
With the good back end infrastructure, they
can able to serve the goods in an
optimization way.
Employment
The more employment would be
created in the country either directly or
indirectly where youth pass out is increasing
as much as creation of employment. It would
be generated in the agriculture,
manufacturing, service industry which,
consists of GDP. The more people get
employed would rehabilitate the economic
cycle.
Retail Industry Allowing FDI in multi brand retail would
infuse the new blood into the industry that
has potential. Foreign players that are
competitive oriented would implement new
strategy.
Another Side Impact
Middle Man
The middle man in the supply chain
including non hoarders shall get affected. In
the long run, they will be deprived of trade
business that causes unemployment. So it
could be matched with the need of
employees by the organized sector by
appropriate policy by the govt.
Dependability
The country may depend on another
country as FDI inflow is increasing where
the country independency is decreasing. The
economic growth may become more
endangered on depending on another
country economic. The capital giant may
dominate the industry exceeding the
domestic player. The revenue would outflow
abroad affecting Forex reserve.
Conclusion
The expectation behind the opening
of FDI in multi brand retail is gigantic. The
govt. should take precautionary measure
framing the rules to ensure that any industry
would not get affected. On the periodical
manner, it should checked how much it
contributes towards the growth of the
economy and impact in other industry.
On the unorganized sector, the
traditional players are side to get affected on
account of opening of FDI in multi brand
retail. Whereas those same kind of retailers
are surviving in US. France, etc. These
players who are having close relationship
with the customers and know their demand
need to enhance the modern trend in retail in
order to survive. Practically speaking, most
of the consumers are reluctant to shop in
organized retail shop spending more time.
Whatever may be the opening, the put
forward is stifle healthy competition that
would change the retail industry. As any
industry greeting modernized in the
globalization, the FDI in retail is not to be
eluded in the developing country where
other developing countries like China are
implemented this practice before a decade.
Bibliography 1. Nilam B. Goyal, ‗Foreign Direct
Investment in India‘.
2. Avhad S.N. ‗Impact of FDI in Retail In
India.‘
3. Government of India - FDI Policy in
Retail - Marketing Mastermind, Feb-
2008, P-57.
4. IISBC Global Research - Jumbo Retail -
organizing Retailing in India Gets llypcr-
May. 2005 P- 23.
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EduIndex Impact Factor 5.18 UGC Approved Journal No 48178, 48818
5. Indian Management Report - Beyond the
retail Hype -Indian Management - Jan -
2007, P-13.
6. S. R. SubbaRao - Organising Retail
Sector In India - Growth and Impact on
Economy - Journal of Indian
Management & strategy - April - June,
2006, P-64.
7. Marketing Management – 11th
Edition –
Philp Kotler.
8. Retailing Management – Text and Cases
2nd
Edition- Swapana Pradhan.
9. Acharaya B. K. and Goverkar P. B.,
(1985), "Marketing and Sales
Management",
Himalaya Publishing House, Bombay.
10. Bose, Biplab, S., (1998) "Hand Book of
Marketing Management", Himalaya
Publishing House, Bombay.
Webliography
1. www.etretailbiz.com
2. www.retailory.com
AMIERJ ISSN–2278-5655 Volume–VII, Special Issue–I, January 2018
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UNDERSTANDING THEBASIC OFBITCOIN
CA KIRAN GAJJAR Assistant Professor
College : Bunt Sangha‘s Anna Leela College
Abstract
Bitcoin is a hot topic and a frequently discussed among investors, entrepreneurs and
stock traders, so you should to know about it. Bitcoin is a digital currency that not controlled
by a centralized authority like a government or central bank..Today Bitcoin has emerged as
the most successful crypto currency. Since its launch in 2009 a virtual currency, bitcoin, has
grown in both its popularity and its use. In simple terms Bitcoin is as cheme designed to
facilitate the transfer of value between the parties. Just like traditional payment systems, which
transfer funds denominated in sovereign currencies. Bitcoin is a crypto currency. A crypto
currency is nothing but a medium of exchange that uses cryptography to manage the creation of
new units and to secure the transactions. Bitcoin is one of the mobile app or computer
program that provides a personal Bitcoin wallet and allows a user to send and receive
bitcoins with them. This paper provides detail information about bitcoin.
Key Words: Bitcoin, Cryptography, Digital currency, Cryptocurrency
I -Introduction
Within a short period of time Bitcoin
grew to comprise billions of dollars of
economic value. Bitcoin holds a universal
value throughout the world. Price of one
bitcoin is 8,31,436 as on 28/12/2017. The
value of Bitcoin is depends on supply and
demand in a market. It means that the price
of Bitcoin would be high if the higher the
number of people interested in buying
Bitcoins, On the other hand, if a lots of
people wants to sell Bitcoins, than it would
reduce price of bitcoin. Bitcoin exchange
rates exhibit somewhat complicated
dynamics. This paper present the micro-
structure of the Bitcoin transaction process
and highlight the use of cryptography for the
purposes of transaction security and
distributed maintenance of ledger.
Methodology
This paper is descriptive in nature
based on secondary data collected through
various websites, book and journals.
Objective
To study various basic aspects of crypto
currency, bitcoin.
II- Bitcoin: anoverview
As mention earlier the Bitcoin is one
type of a payment system that facilitates the
transfer of value between parties. Just like at
traditional payment systems, which typically
involve the transfer of value denominated in
a sovereign currency such as the Indian
Ruppes, US dollar, Bitcoin has its own
metric for value called a bitcoin.at the time
of this writing ,a bitcoin has no legal tender
statusin any jurisdiction. Some economist
shave questioned whether bitcoins meet the
standard attribute so money.
Figure1showsadiagramofpaymentsontheBitc
oinusers‘network.
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Figure 1: The Bitcoin conceptBlockchain
Note: There are four entities A,B,C and D, transacting directly with each other ,i.e. with no
intermediary. In addition, the diagram shows the possibility of B transacting
withitself.Alltransactionsarechronologicallyrecordedinapublicledgercalleda block chain.
Theprocedureforrewardingthosewho
makerecordsontheblockchainembedsthe
economic incentives driving the system and
appears to ―hard-code‖ the growth of the
bitcoin supply. Specifically, there ward for
recording a transaction includes a fee and
newly minted bit coins.
The no desire entities and the
directed arrows depict payments in bitcoin.
As the diagram suggests, the entities transact
directly, in traditional payment systems
where various parties, such as banks,
processors, and networks, are between the pay
or and payees, there is no intermediary in
Bitcoin. In public ledger each and every
transaction is chronology- call recorded,
This record called the block chain, by
participants in the network. There is are
ward for recording transactions in the block
chain, and the participants in the Bitcoin
system compete to make records. Well-
defined process, which guarantee scan senses,
elects the winning participant and the block
chain is updated .Importantly, each participant
keeps a copy of the ledger, and the consensus
of the incremental changes guarantees that
these copies are identical. The Bitcoin
transaction process is fairly complex and
computer scientists are actively investigating
aspects of its security, privacy, distributed
control and incentive schemes.
The Bitcoin transaction process uses
cryptography to verify transactions, process
pay- ments, and control the supply of
bitcoins. Bitcoin relies on two cryptographic
schemes:digital signatures and cryptographic
hash functions.
Digital signatures
Digital signature is a cryptographic
value that is calculated from the data and a
secret key known only by the signer.
In real world, the receiver of
message needs assurance that the message
belongs to the sender and he should not be
able to repudiate the origination of that
message. This requirement is very crucial in
business applications, since likelihood of a
dispute over exchanged data is very high.
Digital signatures are a way to
authenticate a message between a sender
and a receiver in a way that ensures:
(i) authentication: the recipient can
verify that the message came from
the sender,
(ii) non-repudiation: the sender cannot
deny sending the message,
(iii) Integrity: the message has not been
tampered with.
The implementation of digital
signatures involves public key encryption,
where a pair of keys—public and private—
is generated with certain desirable
properties.
A
B D
C
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Cryptographic hash functions
Ingeneral,a crypto graphic hash
function takes as input a string of arbitrary
length and returns as tring with
predetermined length. We will refer to the
input as message and the output
ashashh.The function is deterministic,
meaning that the same input will always
give the same out puth. Another desirable
property of the hash function is that even
small changes in message m are likely to
change hash h = hash(m) significantly. This
makes it very unlikely for someone to be
able to infer the content of the message from
the hash.
III- History of Bit Coin
The first use of Bitcoin as a currency
is thought to be a transaction in May 2010,
where one user ordered pizza delivery for
another in exchange for 10,000 bitcoins.
Since then, an increasing number of
merchants and services have adopted Bitcoin
and the price has generally risen, reaching a
peak. Bitcoin was not traded on any
exchanges in 2009. Its first recorded price
was in 2010. Technically, Bitcoin was worth
$0 in 2009 during its very first year of
existence.
New Liberty Standard Publishes First
Exchange Rate - October 5, 2009
New Liberty Standard opens a
service to buy and sell bitcoin, with an initial
exchange rate of 1,309.03 BTC to one U.S.
Dollar, or about eight hundredths of a cent
per bitcoin. The rate is derived from the cost
of electricity used by a computer to generate,
or ―mine‖ the currency.
The First Bitcoin-to-Fiat Exchange
Occurs - October 12, 2009
Using PayPal, New Liberty Standard
buys 5,050 BTC from Sirius for $5.02,
equating to roughly one tenth of a cent per
bitcoin.
Three New Exchanges Open Supporting
More Fiat Currencies - March 27, 2011
On March 27, 2011, Britcoin
launches the first exchange to trade bitcoin
and British Pound Sterling (GBP). Just days
later, on March 31, Bitcoin Brazil opens a
service for face-to-face exchange in
Brazilian Reals (BRL) and U.S. Dollars. On
April 5, BitMarket.eu begins facilitating
trades in Euros (EUR) and other currencies.
Together, they simplify bitcoin ownership
and trading for hundreds of millions of new
users and the market is expanded
enormously.
Bitcoin 0.8 Causes Brief Hard Fork -
March 11, 2013
Shaking confidence in Bitcoin and
the validity of some transactions, the price
briefly plummets and the Mt. Gox exchange
temporarily suspends bitcoin deposits.
Thanks to a swift and coordinated response
by Bitcoin developers, miners, and
community members, the fork is resolved
within hours after the operators of two large
mining pools, Michael Marsee (of BTC
Guild) and Marek Palatinus (of slush's pool),
honourably forgo some of their accumulated
mining rewards in order to downgrade to the
previous, compatible version. An updated
version, 0.8.1, is released shortly after,
containing safeguards to prevent the original
problem.
Dell Accepts Bitcoin - July 18, 2014
Founder Michael Dell announces on
Twitter that dell.com now accepts Bitcoin.
Customers in the United States (only) can
purchase any product listed on Dell's online
marketplace using Bitcoin. All Bitcoin
transactions are to be handled by Coinbase, a
Bitcoin payment processor. At a yearly
revenue of $56 billion, Dell becomes the
largest company to accept Bitcoin.
Paypal Subsidiary Braintree to Accept
Bitcoin - September 8, 2014
Braintree, a subsidiary of Paypal,
announces that it is partnering with Coinbase
to accept Bitcoin payments on their
platform. Over the next three months, the
two companies will work on integrating
Bitcoin payment processing for Braintree
merchants. The Bitcoin payment option will
be seamlessly enabled for all merchants on
the platform. Braintree merchants need only
sign up for a Coin base account and link it to
their Braintree account
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New York State Releases the BitLicense -
June 3, 2015
Superintendent of New York State
Department of Financial Services, Benjamin
Lawsky, released a set of customized rules
meant to regulate Bitcoin and digital
currency businesses that serve customers
located in New York State. These
regulations are the first ever directly targeted
at digital currency businesses.
Bitcoin declared as a commodity by the
US regulator - September 18, 2015
The Commodity Futures Trading
Commission (CFTC), announced it had filed
and settled charges against a Bitcoin
exchange for facilitating the trading of
option contracts on its platform. They
state: "In this order, the CFTC for the first
time finds that Bitcoin and other virtual
currencies are properly defined as
commodities,".
Bitcoin Sign Accepted into Unicode -
November 3, 2015
The Unicode committee accepted the
Bitcoin currency symbol (uppercase B with
2 vertical bars going through it, but only
visible at the top and bottom) to be in a
future version of the Unicode standard. The
glyph will be given the slot "U+20BF
BITCOIN SIGN" and eventually will render
with standard system fonts.
Steam Accepts Bitcoin - April 27, 2016
The popular gaming platform Steam
began accepting Bitcoin as payment for
video games and other online media. Valve,
the company that owns Steam, enlisted
Bitpay as the payment processor to facilitate
Bitcoin payments and help target
international customers where credit card
payments weren't as ubiquitous.
Craig Wright Claims to be Bitcoin's
Creator - May 2, 2016
Craig Wright publicly announced he
was Satoshi Nakamoto by means of a blog
post. The blog post featured a disjointed
demonstration of a private key signing,
which seemed to be an attempt to verify
Wright was in possession of Nakamoto's
private Bitcoin keys. This verification was
later debunked by the Bitcoin community.
Japan Declares Bitcoin as Legel Tender -
April 1, 2017
Japan recognizes bitcoin as a legal
method of payment. The country's
legislature passed a law, following months
of debate, which brought bitcoin exchanges
under anti-money laundering/know-your-
customer rules, while also categorizing
bitcoin as a kind of prepaid payment
instrument.
Bitcoin "splits" into Bitcoin (BTC) and
Bitcoin Cash (BCH) - August 1, 2017
After years of debating about how
Bitcoin should scale the controversy turned
into action. The Bitcoin code split in two
different directions. One direction
supporting the optimization of Bitcoin
blocks through Segwit, while the other
direction supports bigger blocks of up to
8mb.
IV- Bitcoin ownership and
Bitcoinaddresses
From a technical point of view,
bitcoins reside in what is known in the
bitcoin system as bitcoin addresses. The
ownership of a particular amount of bitcoins
reduces to the capability of sending
payments over the Bitcoin network from the
bitcoin address(es) with which these bitcoins
are being associated. The capability of
sending payments from Bitcoin addresses is
controlled via digital signatures In simple
words, owning the bitcoins in a given bitcoin
address amounts to knowing the private key
which corresponds to the public ID of that
address.
At any point in time every bitcoin
address is associated with a given bitcoin
balance which is, in effect, public
information. This is the case because any
participant in the Bit- coin network can
deduce the bitcoin balances following a
given transaction history that is recorded in
the public ledger. In particular, every
existent or proposed transaction can be
checked for consistency against the
preceding history of transactions i.e. it can
be verified that the amounts transacted are
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available in the corresponding bitcoin
addresses.
V- The Bitcoin transaction process The Bitcoin transaction process has
mechanisms in place which guarantee that
(a) the verification of each transaction is
distributed among multiple participants in
the network,
(b) the recording of each transaction is time
discretized, i.e. transactions are linearly
ordered with consecutive time stamps, (c)
the participants in the payment network
com- pete and are rewarded for recording a
transaction, and (d) multiple nodes cross-
check each transaction record. Below we
review the Bitcoin transaction process
highlighting the above properties.
A Bitcoin transaction as seen in the data.
Exchange rates
Exchanges are platforms on which a user who wants to either sell or buy bitcoins with
anothercurrencycandoso.Muchofthemediacoverageregardingthesky-rocketingprice of bitcoin
is derived from information coming from these exchanges. As figures hows, the value of
bitcoin relative to dollars increased most dramatically in the fourth quarter
of2013.Althoughtradingofthevirtualcurrencybeganaroundmid-2010, muchofthis trading was
fairly sparse up until 2013. For this reason we focus on the period starting in
January2013.Exchange rate USD/BTC
900
600
300
0
2012−01 2012−07 2013−01 2013−07 2014−01 2014−07
1
2
3
4
5
6
7
8
9
10
11
12
13
14
1.3
1.2
0.9
1.5
9.5
0.5
5.4
1.4
1
1
2.5
0.9
0.8
0.7
TX
1.8
1.4
2
12
2.2
1.6
1.9
1.7
0.7
2.1
1.5
15
16
17
18
19
20
21
22
23
24
25
US
D/B
TC
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Intra-day volatility USD/BTC
20
10
0
2012−01 2012−07 2013−01 2013−07 2014−01 2014−07
Above figure shows the
normalized daily exchange rate
volatility of BTC for USD trades.
This measure shows how much the
exchange rate fluctuates on a given
day as a percentage of the average
daily price. Note how remarkably
stable this measure of volatility is.
With a handful of exceptions, it has
stayed below the 12 − 15 percent
limit. It appears that, accounting for
the large mean growth of bitcoin
value, the risk associated with holding
bitcoins for very short periods of time
has remained relatively stable.
Notably, however, the disruptions in
the normalized exchange rate
volatility are of substantial magnitude
and appear difficult to explain or to
predict. In particular, we note that
spreads in highly liquid foreign
currency exchange markets are
generally very small or else there
would be room for arbitrage. Thus, if
we were to hypothesize that the
bitcoin market is similarly highly
liquid, we would expect there to be
very little spread between its different
exchange rates.
VI-Conclusion
Motivated by recent
developments in the Bitcoin ecosystem,
this paper provides the necessary
technical background to understand
basic Bitcoin operations. This paper
discussed basic concept of bitcoin,
history of bitcoin, general patterns of
Bitcoin usage, and examines the use of
Bitcoin for investment and payment
purposes. The number of daily users
may have doubled every eight months,
the transaction volume is negligible
compared to the volume of U.S.
payment systems. In addition, the
patterns of circulations of bitcions and
the dynamics of the bitcoin exchange
rate are consistent with low usage of
Bitcoin for retail payment transactions.
Finally, conclude that the exchange rates
between bitcoin and other currencies are
not well aligned, which may because of
lack of depth of the exchange markets
and as costly exchange rather than
unexploited arbitrage opportunities.
References
https://www.gqindia.com/content/if-youd-
invested-100-in-bitcoin-in-2010-heres-
how-rich-youd-be-today/
https://futurism.com/images/the-entire-
history-of-bitcoin-in-a-single-infographic/
https://99bitcoins.com/price-chart-history/
Yermack, David, ―Is Bitcoin a Real
Currency? An economic appraisal,‖
NBER working paper, December 2013.
Lo, Stepahanie and J. Christina Wang,
―Bitcoin as Money,‖ Federal Reserve
Bank of Boston, Current Pllicy
Perspectives No 14-4, 2014
ST
D(%
)
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AN IMPACT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON
ORGANIZATIONAL PERFORMANCE
DR.KALHAPURE BALASAHEB. B.
HOD & Assist. Prof. in Commerce,
Annasaheb Awate College Manchar, Ambegaon,Pune. (M.S).
Abstract
The aim of this research paper is focused on the impact of the strategic management
of human resource in achieving organizational performance. This research paper was
conducted based on primary and secondary sources. How much organizations appear
competitive in the market through achieving the performance indicators? How important is
the management of human resources in achieving organizational performance? So, through
the skills, behaviors and attitudes would be expected by human resources to achieve the
required performance in the organization. Organizational performance is getting more and
more important, especially in a market with greater competition and dynamic.
Organizational performance is measured through different indicators directions. It
guarantees the continuity of the organization to be competitive in a global marketplace.
Normally, the implementation of performance indicators achieved through human resources.
Human resources are the key for keeping the organization in the market so competitive.
These human resources need to be managed effectively to achieve the required performance
of the organization. It is necessary to manage strategically the human resources and to adapt
at its strategy with organizational strategy.
Introduction: -
Human resources are regarded as one
of the most important sources of today's
firms. Human resources management is
more important than other competitive
sources because these people use other
assets in organization, create
competitiveness and realize objectives. Thus
firstly, organizations must understand the
expectations of their workforce in order to
achieve the desired performance. The
realization of the expectations of employees
will enable the desired behavior of
employees in the organization. Some of the
desired outcomes of the organization in
managing their workforce are: competence,
cooperation of employees with managers,
cooperation of employees between them,
showing the capabilities of employees;
motivation, commitment and satisfaction;
attitude and presence; employee behaviors.
Organizations are seeking to create much
competition between them, taking more
market, more customers, more sales, etc.
Rapid changes stemming from globalization,
advancement of information systems and
other factors have caused higher
competition. Many organizations are driven
by the market to set their goals in their
performance. Some of the goals are: cost
reduction, achieving sales levels, increasing
the number of customers, increasing the
market percentage, improving productivity
and quality, innovative products. The
realization of these goals will be achieved
through the human resources management in
organizations. Workforce, as the key to
success, will enable the achievement of
organizational performance.
The overall goal of performance
management is to create a culture as high
performance in which individuals and teams
to take responsibility for the continuous
improvement of business processes and their
skills and contribute in achieving the targets
set by managers. In particular, management
performance can be expressed as the
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approximation of individual objectives of
employees with organizational objectives
provided that employees support the culture
of the organization. It provides for
expectations to be defined and agreed in
terms of role responsibilities and
accountabilities skills and behaviors
The purpose of strategic human
resource management is to improve business
performance through people management.
The organizations need to manage their
human resources effectively and efficiently
to achieve the desired goals and objectives.
The achievement the goals and objectives
translate also in better performance. So, the
issues raised for discussion are: How should
organizations manage their main source –
human resources? Does strategic human
resource management help to meet the
needs, the goals and objectives of the
business? As should be adapted strategic
human resource management to realize the
performance? How should adapt strategic
management of human resources to increase
organizational performance?
Objectives:
To observe if organizations use the
strategy of human resource management
for the achievement of their performance
objectives.
To observe if organizations use the
strategy of human resource management
for the achievement of their performance
objectives.
To observe closely how applicable is in
practice the theoretical aspect of strategic
human resource management for the
achievement the organizational
performance.
Literature Review;
The achievements of organizational
objectives can be different in different
organizations. The studies emphasize the
impact of HRM on organizational
performance. Basically, and other studies in
this area, point out that it is necessary to
achieve organizational objectives and
management of human resources should be
strategic. Also, the strategies of human
resource management should be integrated
with the overall organizational strategy in
the context of achieving the required
performance. There has been much research
on strategic human resource management
that affects organizational performance. The
discussions and definitions will be divided in
two parts of speech: the strategic
management of human resources and
organizational performance.
Strategic HRM Meaning;
Strategic HRM is a process that
involves the use of overarching approaches
to the development of HR strategies, which
are integrated vertically with the business
strategy and horizontally with one another.
These strategies define intentions and plans
related to the overall organizational
considerations, such as organizational
effectiveness, and to more specific aspects
of people management, such as; resourcing,
learning and development, reward and
employee relations. Strategic HRM focuses
on actions that differentiate the firm from its
competitors .It is suggested by Hendry and
Pettigrew that it has seven meanings:
A coherent approach to the design and
management of personnel;
Systems based on an employment policy
and workforce strategy;
Matching HRM activities and policies to
some explicit business strategy;
Seeing the people of the organization as
a strategic resource;
Achievement of competitive advantage.
Often underpinned by a ―philosophy
The use of planning
Organizational performance concept;
Campbell‘s theory defines
performance as behavior or action relevant
to the attainment of an organization‘s goals
that can be scaled, that is, measured.
Moreover, job performance is defined as
what one is paid to do, or what one should
be paid to do. The theory states that the
measurement options, be they ratings from a
supervisor, peer, or self, a simulated work
sample, or hard criteria besides being valid,
reliable, and not deficient should be free of
contamination from sources of variation that
are not under the control of the individual
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.Situational enhancers or constraints, if not
taken into account in an appraisal, can
contaminate the mean, variance, or both with
regard to an individual‘s performance.
Observation and interpretation hold the key
to the establishment of effective criteria.
Yet, an ongoing problem in appraising
people is the lack of reliability in the
observation of their behavior This
unreliability is largely attributed to well-
known rating errors such as ―first
impressions‖, ―halo‖, and ―similar-to-me‖.
Lifson found that up to one-third of
performance measurement variance is due to
rater differences despite the fact that the
observers had considerable experience in
observing and evaluating people in the
workplace. Lance corroborated this finding.
Experience, however, is not a substitute for
training. To solve the problem regarding
lack of reliability, an observer must be
trained. In this section, training programs
that have been shown to be effective are
described, and the necessity of taking
context into account is explained.
Organizational performance is one of
the most broadly and extensively used
dependent variables in organizational studies
today, and yet, at the same time, it remains
one of the most imprecise and loosely-
defined constructs. In the strategy literature,
the focus of attention on this construct has
been concerned almost entirely with
financial measures of performance.
Conceptually, organizational performance
has been defined as the comparison of the
value produced by a company with the value
owners expected to receive from the
company Ramanujam indicate that a narrow
definition of performance focus on the use
of simple outcome-based financial indicators
that are assumed to reflect the fulfilment of
the economic goals of the firm.
Research Methodology
This study was conducted through
the collection and analysis of various
publications on this field. The secondary
source, refer various publications that have
been made in this area about empirical
studies, various academic debates and
analyzes the different findings. These
publications have been published in various
journals, conferences and books.
HRM and performance;
HRM practices are expected to enhance
organizational performance and enable the
organization to gain a competitive
advantage. Such practices are detailed as
follows
Self-managed teams and decentralization
of decision-making as the basic principles
of organizational design.
Comparatively high compensation
contingent on organizational performance.
Reduce status distinctions and barriers,
including dress, language, office
arrangements, and wage differences across
levels.
Extensive sharing of financial and
performance information throughout the
organization. Employment security.
Selective hiring of new personnel.
Extensive training.
Outcomes
Organizational outcomes, such as
productivity, quality, service, efficiencies,
customer satisfaction.
Financial accounting outcomes, such as
profits, sales, return on assets, return on
investment.
Capital market outcomes, such as market
share, stock price, growth
HR-related outcomes, such as turnover,
absenteeism, job satisfaction, commitment.
Advantages;
Performance management strategy
should focus on the development to a
continuous and flexible process involving
managers and all the organization that
operate as a single team. This should
determine how they can best work together
to achieve the required results. This makes it
possible to focus on the planning of future
performance and performance improvements
existing. HRM Strategy provides the basis
for regular dialogue and frequent between
managers and other employees about
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performance needs and further development
of the organization. Strategic human
resource management may bring a number
of benefits to the organization.
Participating in strategic planning and
influencing the strategic direction of the
company as an equally entitled member
of top management
Contributing to the goal accomplishment
and the survival of the company,
Supporting and successfully
implementing business strategies of the
company,
Improving the responsiveness and
innovation potential of the company,
Increasing the number of feasible
strategic options available to the
company,
Improving cooperation between the HRM
department and line managers.
Creating and maintaining a competitive
advantage for the company
Finding;
These organizations to strategically
manage their human resources pay attention
in:
a. Recruitment and selection of appropriate
staff;
b. Career Management in the organization;
c. Training and development of employees;
d. Job satisfaction;
e. Creating a dynamic environment;
f. Motivating employees.
In other words, organizational
performance has changed through strategic
management of human resources
management. This makes possible the
achievement of organizational performance
objectives. It also enables the organization to
be competitive. SHRM is a very important
tool that ensures the continuity of the
organization
Conclusion;
Human resources are playing an
important role in achieving these
performance indicators. But before that,
organizations should realize the expectations
required from employees and so the
employees show their skills, be motivated
and behave in the manner required by the
organization to achieve performance.
Strategic HRM is a detailed process for
human resource management throughout the
organization that it‘s integrated with the
organization's overall strategy. It enables the
organization having employees with the
right skills and putting them in positions
according to the level of their qualification
and skills. Different authors have tried to
give different definitions for organizational
performance.
Organizations are trying to create as
much competitive in the market, reaching to
manage their human resources in achieving
organizational performance required. Some
of the goals are cost reduction, achieving
sales levels, increasing the number of
customers, increasing the market percentage,
increasing product quality, innovative
products, improve productivity.
In general, organizational
performance is related to the achievement of
the objectives required by the organization.
The achieving organizational performance is
a result of the behavior of employees in the
organization. Policies and practices of
organizations motivate employees and they
give impact on organizational performance.
Some of these are: human resource planning,
recruitment, selection, training and
development, compensation, performance
management and employee relations. A link
between Strategic HRM and organizational
performance has been developed by author
Michael Armstrong. According to him, the
performance is a function of the Ability +
Motivation + Opportunity. By achieving the
expectations of employees, it will be reached
the performance required by the
organization. Organizations need to consider
human resource as a tool to gain competitive
advantage needed to create appropriate
policies and practices. Also, authority and
responsibility must involve in the entire
organization working as a single team and
not focus only managers. Performance
management strategy should focus on the
development of a continuous and flexible
process.
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References; 1. Seth Publication T.Y.B.Com Syllabus
Mumbai University.
2. Human Resource Management
Challenges,
http://www.villanovau.com/human-
resource management-challenges.
3. MHRM Marketing Research Journal
August-2014.
4."A Framework for Human Resources
Management International Civil Service
Commission",
http://icsc.un.org/resources/hrpd/hrm/IC
SC_hrm_eng.pdf
5. International Journal of Scientific &
Technology Research Volume 1 Issue
July 2012. ISSN 2277-8616.
6. - Practical Application of Science Volume
II, Issue 2 (4) / 2014.
7."Introduction to Human Resource
Management and Environment",
Available: http://www.mu.ac.in/
8. Guest, D. E. (2011). Human resource
management and performance: still
searching for some answers. Human
Resource Management Journal, 21 (1),
3-13.
9. Hendry, C., & Pettigrew, A. (1990).
Human resource management: An
agenda for the 1990s. International
Journal of Human Resource
Management, 1, 17-43.
10. HRM Studies. Journal of Management
Studies, 46 (1), 143-155.
11., R., Hollenbeck, J. R., Gerhart, B., and
Wright, P. M. (2007). Fundamentals of
human resource management, (2nd ed).
Boston MA, McGraw Hill.
12. Rogers, E. W., & Wright, P. M. (1998).
Measuring organizational performance
in strategic human resource
management: Problems, prospects, and
performance information markets.
Human Resource Management Review,
8 (3), 311.
13. Venkatraman, N., & Ramanujam, V.
(1986).
14. WWW. Various net Web sites.
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CHALLENGES FACED BY BANK EMPLOYEES WITH THE ADVENT OF
INFORMATION TECHNOLOGY: A MODERN OUTLOOK
PROF. AUSARE INDIRARANI YASHWANT
Asst. Professor, DR. D. Y. Patil ACS, College, Pimpri, Pune 411018
Abstract:
With the advent of Information Technology enormous employment opportunities in the banking
sector has been generated. In this paper an attempt has been made to understand the challenges
faced by bank employees with the arrival of computerized system. Technology has sown the
seeds of competition in every sector of the economy & banking sector is no exception to this
event. Global economy will bring in new challenges & opportunities in human resources. The
need of the hour is that management would have to tackle several applications at the entry level
of recruitment. Banks have to be prepared to modify recruitment policy & take responsibility to
correct ethical business practices. The objective of this research is to identify the challenges
faced by the bank employees in the digital economy. Hence the study proposes to emphasize on
effective use of information technology by bank officials & create significant value that will
provide competitive edge. Current economic trends are compelling banking sector to re-focus on
business effectiveness & satisfy the needs of the customers. Therefore this research paper can be
of relevance to bank executives, management & employees to adopt newer ways to improve
business effectiveness. It is therefore a welcome change to be looked at as it would result in
improved productivity in service sector in enormous ways. Study reveals that we directly or
indirectly use computer & IT to improve our quality of life, hence banks should make
modifications with the techno-savvy environment.
Keywords: Information Technology (IT), Internet Banking, Virtual Banking, Digital Economy.
Introduction:
Information Technology has
momentous influence in every field. In order
to remain competitive organizations have to
adopt new practices and new technologies. It
is technology which has modified the
banking businesses. The need of the hour is
to train the bank employees so as to cope up
with this change and acquire new skills. It
has become vital in every field and its
absence can result in lack of knowledge,
poor decisions and ultimately business
failure. Because of technology and
computerized system many delivery
channels have been created. Organizations
which do not invest in technology make
their Employees struggle for information. It
has been witnessed that today‘s customers
expect timely, convenient, quick and
multiple delivery channels. With the
passage of time the attitude of customers are
also changing. Hence only those business
will survive who can fulfill their demands.
And this can be done by adopting
technology. Therefore there is an urgent
need for bank Employees to keep
themselves updated with new set of skills
and technical expertise. This is the highest
challenge for bank employees as they have
to handle various queries raised by
customers and respond to the change.
There is direct relationship between
technology and quality services in banking
industry. The decade of nineties have
witnessed a sea change in the way banking
is done in India today. Technology has made
possible ‗Anywhere and anytime banking
and it is now possible to market financial
services on a global basis. Similarly, it is
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important for Bank Executives &
management to provide training to users at
regular intervals. Technology can be fruitful
only if users (Employees) are aware of how
to use it efficiently.
Objectives:
The research paper has three fold objectives:
1. To study new challenges faced by bank
Employees with the advent of IT.
2. To understand innovative business
practices adopted by banks.
3. To give suitable recommendations to
bank officials to implement best work
culture in this competitive environment.
Research Methodology:
The present study is based on
secondary data. It is descriptive in nature.
Data has been collected from several
Journals, Periodicals, and websites. Various
literature review studies have also been
referred for this research study.
Innovativeness:
This research is an attempt to see
whether technology in banks has any impact
on the recruitment and Employees
operational performance in Banks. Since
banking industry has displayed
multidimensional growth the need of the
hour is to set up informational websites and
speed up the banking transactions. There is
also need for bank employees to change
their method of working. Due to
computerization the employees have no
choice but to accept the change.
Management should plan and train
employees to enhance their performance &
modify their financial system. The main aim
of this paper is to bridge the gap between
existing knowledge of bank employees and
update their skills to match the modern
expectations of customers.
In the days to come, banks are
expected to play a very crucial role to keep
pace with modern technology. Bank officials
should introduce skill inventories and focus
towards TQM viz., quality circles
.Competent employees are required for
modern working system in banks for
survival & growth. Research scholars have
contributed their valuable articles on the
issues related to banking reforms. Yet there
are several areas left untouched &
unexplored.
Relevance of the study:
This study shall be fruitful to the
stakeholders, bank executives, management
& employees at large as they can take vital
decisions and make alterations accordingly
with these valuable suggestions. It shall
result in providing hassle free services.
Challenges faced by bank employees:
Human resource managers in public
sector banks have to cope up with the
environmental changes. With the emergence
of virtual banking competition in market
have increased. Hence human resource
related problems are hampering the growth
and efficiency of financial sectors. Human
resource strategy should be adopted to
motivate, train, recognize, and reward to
improve their optimum capabilities. It is
necessary for policy makers, managers to
develop skill human capital to improve their
internal process. Information Technology is
spreading and has implications in almost
every section of economy including banks.
This is biggest challenge that banks
have to employ Information Technology
Solutions to be ―futuristic‖ and meet the
multifarious challenges of globalization. The
new challenge faced by bank officials is to
educate the customers about cashless
economy, its benefits, safety & easy
accessibility. Thus increasing competition &
technology driven economy has created a
big challenge for traditional operating banks.
Moreover trust factor is the biggest hurdle to
online banking as people hesitate to disclose
their personal information. Banks therefore
require an appropriate mix of human talents
to implement their operational strategies.
Another obstacle is that there is an acute
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scarcity of web developers, content
providers & knowledgeable professionals to
route banking transactions through internet.
Innovative business practices adopted by
banks leads to following effects:-
Information technology innovations by
the banking sectors have reduced cost of
labors.
There is universal co-ordination between
head office and branches
Use of technology in banks have reduce
inter- market differentials
Created standardized system of services
to its customers
There has been growth in the form of
ATM‘s as a complementary distribution
channels.
Technology has opened the way for
banks to improve their costs structures.
Banks were able to induced the
customers to change their attitude and
adopt digital e –banking services.
In brief this transformation towards
‗ virtual banking‘ will further require new
IT applications , new managerial practices
and new consumption patterns to remain
stable is financial services and to captured
new strategy.
Analysis of the study:
In view of the above discussion on
this research topic the following have been
evaluated:
Banks have also realized the
importance of computerized system and they
are planning to gear up to have sound
customer services. Some of the banks viz.
Bank of Maharashtra, State bank of India
has formulated long term plans to trigger
the technological invasion.
Thus, software development
activities are provided by banks to ease the
employee to cope up with new working
processes. It has been surveyed that almost
52% customers are moving towards online
banking. Now, banking industry will require
those candidates having analytical &
computer-skills. Top executives should also
take care of safety & security and keep away
from technology risks.
Recommendations:
In the near future the biggest concern for
banks will be to implement best IT
solutions in the compliance area.
They should ensure safety & security to
their customers.
Banks should also create awareness
among the people about cashless
economy & its benefits.
Quality & team building practices should
be designed at work place & contribute to
overcome potential programs.
Human resource professionals should
keep pace with the issues like privacy,
data protection, and authentication.
Also an attempt should be made to set
global standards to operate hassle free
online banking transactions.
Finally it may be suggested that the
employees should have ability to liaison
with individuals & organizations‘.
Ability to identify others special talents
maintain and monitor information system.
Conclusion:-
In conclusion it is agreeable that
nowadays human resource functions are
considered as an essential part of the
management. With the advancement in IT
the organization needs to develop an
enthusiastic, result cantered, and dedicated
work force. Also the four dimensions viz.
people, powers, culture and infrastructure
need to be managed which is essential
foundation for survival and profitability.
Overall the Indian banking sector is
healthier today due to arrival of IT
revolution. Hence with this transformation
bank employees must continuously seek
new skills & cope up with the competitive
work culture. To sum up speed & efficiency
are the new mantras expected by today‘s
techno savvy customers.
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References:
1. Dhiraj Sharma, Foundations of IT, Excel
Books, New Delhi, 2008.
2. The IUP Journal of IT, IUP Publications
Vol. XIII No.3, Sept 2017
3. V. Rajaram, Introduction to IT, 2nd
Edition, Feb 2014, 2nd
Edition.
4. Jawad Abbas, Impact of Technology on
Performance of Employees, World
Applied Science Journal, 2014.
5. Jim Davis, Information Revolution,
Wiley Pub. 2006.
6. Girish Rann, Global HRM, 2009,
Rajdhani Printers, Delhi.
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GST (ONE NATION ONE TAX)...A STUDY OF IMPLEMENTATION AND
CHALLENGES
DR. D.D.BALSARAF
Principal, Indrayani College, Talegaon,
Pune
SHRUTI GANPULE
Assistant Professor, Pratibha College of
Commerce and Computer Studies, Chichwad
Abstract:
"Goods and Services Tax" is a comprehensive indirect tax on manufacture, sale and
consumption of goods and services throughout India, to replace previous taxes levied by the
Central and State governments. Goods and services tax is levied and collected at each stage of
sale or purchase of goods or services based on the input tax credit method. The introduction of
Goods and Services Tax (GST) is a significant step in the reform of indirect taxation in India.
Amalgamation of several Central and State taxes into a single tax is expected to mitigate
cascading or double taxation, facilitating a common national market. The simplicity of the tax
would lead to easier administration and enforcement. GST is being enforced as CGST, SGST and
IGST. An attempt is made to study the ground reality of the slogan „One Nation One Tax‟.
Key words: GST, CGST, SGST, IGST
Introduction:
Origin of the concept: During 18th
Century a German Economist conceived the
idea of Value Added Tax (VAT) or
Harmonized Sales Tax (HST). He thought of a
sales tax on goods which would not affect the
cost of manufacture or distribution but would
be collected on the final price charged to the
consumer. The tax was finally adopted by
France in 1954. In initial years it was imposed
on large businesses but after the due course of
the time, it was imposed to include all
business sectors.
Indirect Tax Regime in India:
Indirect tax is a type of tax where the
incidence and impact of taxation does not fall
on the same entity. In the case of indirect tax,
the burden of tax can be shifted by the
taxpayer to someone else. Indirect tax has the
effect to raising the price of the products on
which they are imposed. Customs duty,
central excise, service tax and value added tax
are examples of indirect tax. The Indian
indirect tax regime is characterized by
multiple taxes, such as excise duty, Customs
duty, VAT, Central sales tax, service tax. It
also includes local levies, such as octroi and
entry tax. Historically, none of these taxes
were creditable against one another. A part
of the Customs duty and excise were
creditable. Recently, service tax has also been
brought into the creditable category. However,
VAT, Central sales tax and octroi were
entirely non-creditable taxes. In India certain
taxes are levied by the Central Government
and some are levied by the State
Governments. The distribution of power to
levy these taxes is clear and unambiguous. As
a result, over the period, the Central and the
State Governments are rigorously trying to
expand their respective tax regime.
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Taxes subsumed by GST in India
Central Level State Level
Central Excise duty State Value Added Tax
Duties of Excise (Medicinal and Toilet
Preparations)
Entertainment Tax
Additional Excise Duty Central Sales Tax (levied by Centre and
collected by State)
Service Tax Octroi and Entry Tax
Additional Customs Duty (Countervailing
Duty)
Purchase Tax
Special Additional Duty of Customs Luxury Tax
Cesses and Surcharges Taxes on lottery, betting and gambling
Taxes on advertisement
State Cesses and Surcharges.
Source: www.cbec.gov.in
Goods and Service Tax:
The Goods and Services Tax is meant to
be a unified indirect tax across the country on
products and services. In the current system in
India, tax is levied at each stage separately, by
the Centre and the State, at varying rates, on
the full value of the goods. But under the
Goods and Services Tax system that is set to
be introduced, tax will be levied only on the
value added at each stage. It is a single tax
(collected at multiple points) with a full set-off
for taxes paid earlier in the value chain. Thus,
the final consumer will bear only the GST
charged by the last dealer in the supply chain
with set-off benefits at all the previous stages.
Research Methodology:
The research paper is based on
extensive study of available secondary data.
The researcher has used exploratory research
technique. The study is based on review of
literature available in respective journals,
annual reports, newspapers and magazines,
research papers published by eminent research
scholars.
Literature Review:
Girish Garg (2014) says GST will create a
single unified Indian market to make the
economy stronger. GST is set to integrate
state economies and boost overall growth.
According to Lourdunathan F. (2017) GST
will provide relief to producers and consumers
by providing wide and comprehensive
coverage of input tax credit set off, service tax
set off and subsuming the several taxes.
Efficient formulation of GST will lead to
resource and revenue growth for both center
and states majorly through widening of the tax
base and improvement in tax compliance.
Arpit Shailesh and Dr. Taruna (2016)
concluded that GST is helpful for the
development of Indian economy as well as it
will be very much helpful in improving the
GDP of the country more than two percent.
The GST TAX reforms would impact national
economy, international trade, firms and
consumers. In the opinion of Sukhram Mujale
(2017) GST can also be used as an efficient
tool for fiscal policy management if
implemented successfully due to nationwide
same tax. Implementation of GST requires
undivided efforts of all stakeholders whether
government both central state, industries and
consumers. According to Dr. Mahesh Daru,
introduction of GST is only the next stage of
reform. One should keep expectations at a
realistic level. Monika Sherawa and Upasana
Pande (2015) mention that consumption and
production of goods and services is
undoubtedly increasing and because of
multiplicity of taxes in current tax regime
administration complexities and compliance
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cost is also accelerating. A simplified, user
friendly and transparent tax system was
required which can be fulfilled by
implementation of GST. GST will give India a
world class tax system by grabbing different
treatment to manufacturing sector. According
Dr.Atul Bansal, under GST, the taxation
burden will be divided equally between
manufacturing and services, through a lower
tax rate by iccreasing the tax base and
minimizing competition. S. Muthupandi and
Dr. A Joseph Xavier undertook a study of
awareness of GST among college students.
They concluded that providing adequate and
relevant fundamental information about GST
is necessary to make them better understand
the general principle of GST and also conform
to regulation.
Goods and Service Tax
The Goods and Services Tax is meant
to be a unified indirect tax across the country
on products and services. In the current
system in India, tax is levied at each stage
separately, by the Centre and the State, at
varying rates, on the full value of the goods.
But under the Goods and Services Tax system
that is set to be introduced, tax will be levied
only on the value added at each stage. It is a
single tax (collected at multiple points) with a
full set-off for taxes paid earlier in the value
chain. Thus, the final consumer will bear only
the GST charged by the last dealer in the
supply chain with set-off benefits at all the
previous stages.
Features of GST:
This tax is a multi- stage and destination
based tax that will be levied on every value
addition.
The GST has a system called input tax
credit, by which sellers can claim the tax that
has already paid. This will reduce the final
liability at the consumers‘ end. This step is
taken to overcome cascading effect of
CENVAT.
The GST shall have two components: one
levied by the Centre (referred to as Central
GST), and the other levied by the States
(referred to as State GST). Rates for
Central GST and State GST would be
approved appropriately, reflecting revenue
considerations and acceptability.
Integrated Goods and Service Tax (IGST)
is a tax levied on all inter state supplies of
goods and / or services. IGST will be
applicable in both cases of import into
India and export from India.
The three types of tax structure is
implemented to help tax payers take the
credit against each other, thus ensuring
‗One Nation, One Tax‘.
Input tax Credit is available which reduces
the taxes paid on inputs from taxes to be
paid on output. When any supply of
services or goods are supplied to a taxable
person, the GST charged is called as Input
Tax.
There are four slabs of GST. Goods and
services are taxed at 5 percent, 12 percent,
18 percent and 28 percent.
Benefits of GST :
Easy compliance:
A robust and comprehensive IT system is the
foundation of the GST regime in India. All
services such as registrations, returns, and
payments would be available to the taxpayers
online, which will make compliance easy and
transparent. GST is introduced to ensure
indirect tax rates and structures to remain
common across the country. This will result in
increasing certainty and ease of doing
business. Thus, GST would make doing
business in the country tax-neutral,
irrespective of the choice of place of doing
business.
Removal of cascading:
The system of input tax-credits
throughout the value-chain, and across
boundaries of States, would ensure that there
is minimal cascading of taxes. This would
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reduce hidden costs of doing business. This
will automatically result in improving
competitiveness among the business.
Boost to manufacturers and exporters:
The subsuming of major Central and
State taxes in GST, complete and
comprehensive set-off of input goods and
services, and phasing out of Central Sales Tax
(CST) would reduce the cost of locally
manufactured goods and services. This will
increase the competitiveness of Indian goods
and services in the international market and
give boost to Indian exports. It‘s a better
opportunity to Indian exporters to compete
globally.
Ultimate benefit to Consumers:
The multiple indirect taxes levied by
Central and the state governments are
abolished and single tax rate throughout the
country is introduced in the form of GST.
Cascading effect has come to an end. It will
result in reduction of the prices of goods and
services at the hands of the consumers. There
will be only one tax from the manufacturer to
the consumer which will improve
transparency and reduce overall tax burden.
Limitations of GST
Too many Tax Rates:
Most of the countries which have
implemented GST have single GST rate. Only
a few have two. In India there are four slabs of
GST 5 percent, 12 percent, 18 percent and 28
percent.
Compliance becoming Costly and Tedious:
The returns of GST are to be filed
online. There seems to be lot of confusion in
filing such returns. The question arises
because of limited computer literacy,
availability of internet connection, and poor
idea about filing returns. Small scale business
enterprises may suffer due to poor or
interrupted internet connectivity, limited
computer literacy and unavailability of expert
chartered accountants.
Possibility of Tax Evasion:
The threshold of GST is businesses
with more than Rs. 20 lakh annual turnover.
This means businesses with less than Rs. 20
lakhs turnover are exempted from GST. It
creates a loophole which may result in a
possibility for mushrooming of dummy small
scale companies that remain outside the tax
system. So a possibility of tax evasion cannot
be ruled out.
Goods and Services beyond the scope of
GST:
There are certain services and goods
which are not covered under GST. To name a
few, petroleum products, liquor, Services of
employee to his employer, court or tribunal
services, duties performed by Members of
Parliament, State Legislatures, Panchayats,
Municipal or other local authorities, services
of funeral, burial or crematorium, sale of land
and building, actionable claims (other than
lottery, betting and gambling).
Six Months of Implementation of GST:
The new GST tax regime came to
force on JULY 1, 2017. Since then it has been
one of the most rigorously discussed subject
across the country. The implementation of
GST regime involved merging of all indirect
taxes into a single tax. It involved a conscious
effort to not hurt any sector that falls under the
ambit of GST. However the implementation
was not smooth. It gave rise to certain issues
which are as follows.
12 percent GST imposed on sanitary
napkins. Medical professionals and women
across the country protested against this
decision.
GST of 28 percent was imposed on all
handicraft products. Earlier it was just 12
percent before GST. The handicraft workers
agitated that it was not possible for them to
procure raw material at such a high tax rate
and still keep their business profitable.
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A lot of confusion was there in filing GST
tax returns. Even the qualified, experienced
chartered accountants were in trouble. It
resulted in fall in government‘s tax revenue
for the month of October, 2017 which was
near about Rs. 86,346 crore.
In October 2017, the GST Council revised
the rates of 27 products. A group of
ministers were appointed to look into the
issues faced by these businesses.
The council further slashed rates of GST on
178 products in November 2017. It
significantly brought down the burden on
various sectors. Daily consumption units
like chocolates, chewing gums, beauty
products became cheaper. Restaurants also
became cheaper to go.
The Government also extended the
deadlines for filing tax returns so that tax
payers are able to file their returns on time
and without confusion. The GST council
announced in November 2017 and had
allowed businesses with turnover of up to
Rs. 1.5 crore to file final returns GSTR-1
quarterly.
Recently GST council has announced that
businesses with turnover of more than Rs.
1.5 crore, GSTR-1 has to be filed for the
period of July – November by January
10,2018. Earlier it was December 31, 2017.
The GST provision requiring transporters to
carry on an electronic way bill (e-way bill)
when moving goods between states will be
implemented from February 1 to check
rampant tax evasion and boost revenues by
up to 20 percent.
Conclusion:
Due to complexities involved like
negotiations between 29 states, 2 Union
Territories with legislature and the Central
Government, it took considerable time to
finalize the structure and operational aspects
of the tax. The goods and services tax (GST)
Bill was passed unanimously in the Parliament
in August, 2016 reflecting cooperative fiscal
federalism in the pursuit of reforms. After
ratification by a majority of states and assent
of the President, it was enacted as Constitution
(One Hundred and First Amendment) Act,
2016. Any change comes with positive and
negative reactions. GST being a major tax
reform in India is not exception to this. GST
will definitely have a positive impact on
various sectors and industry. GST is likely to
improve tax collections and boost India‘s
economic development by breaking tax
barriers between states and integrate India
through a uniform tax rate. Speaking on the
concluding day of the 11th Global Doctors‘
Summit at Kolkata, India‘s Vice President
Venkaiah Naidu said, ― The Goods and
Service Tax (GST) is going to change India‘s
economy though initially it might have caused
pain. As rightly put up by the finance minister
Arun Jaitley ‗The introduction of the Goods
and Service Tax has provided a significant
opportunity to improve growth momentum by
reducing barriers to trade, business and related
economic activities‘.
References:
https:// www.ndtv.com/business/economic-
growth- slow- downin 2016-17-says-arun-
jaitely-1793526
https://www.google.co.in/amp/s/www.forbe
s.co
www.deccanchronicle.com
https://economictimes.indiatimes.com
https://timesofindia.indiatimes.com
http://www.taxmanagementindia.com/visito
r/detail_rss_feed.asp?ID=1226
http://www.gstindia.com/
http://www.thehindubusinessline.com/toda
yspaper/tp-others/tp-
taxation/article2286103.ece
http://www.moneycontrol.com/newstopic/g
st/
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Features of Good and Service Tax in
India‖,
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